EXAMPLE

Dow Jones Industrial Average with Chaikin Volatility Chaikin Volatility and Price EnvelopesPrice Envelopes at 10% around a 21 dayexponential moving average.

Dow Jones Industrial Average Chaikin Volatility

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  1. A Chaikin Volatility peak occurs as the market retreats from a new high and enters a trading range.
  2. The market ranges in a narrow band - note the low volatility.
    The breakout from the range is not accompanied by a significant rise in volatility.
  3. Volatility starts to rise as price rises above the recent high.
  4. A sharp rise in volatility occurs prior to a new market peak.
  5. The sharp decline in volatility signals that the market has lost impetus and a reversal is likely.