Ask Colin

With respect to “Bull Market Phase Three”, what would be your definition of a significant “increase in volatility” which would cause you to be concerned?

I think the most useful measure is a one period ATR% in three time frames – daily/weekly/Monthly. See the Weekly Market Charts and Analysis for the week to12 December 2014 for an example of this kind of analysis.

This chart shows how it looked on a daily timeframe in the last phase Three:

Keywords:

DOW THEORY
MARKET EXPOSURE STRATEGY
VOLATILITY