Daily Range Contraction

The following charts are examples from a scan for range contraction on a daily timeframe. The range contraction ratio (RCratio) indicator is in the bottom sub-window of each chart. Low values for RCratio indicate more range contraction. Range contraction often leads to range expansion. The direction of range expansion coming out of a low volatility point is uncertainty. The first chart is the Ultrashort Real Estate Fund (SRS). Many of the bear market ETFs have a similar pattern.

The second chart is a gold related chart. See the Technical Picture post from Friday describing the coil (involving range contraction) in many gold stocks.