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DJ EuroStoxx50 Futures Volatility Forecast (24/10/2010)

The European Index reached 2870 in the last week even if some early signs of retracement started to become more evident. The TGARCH volatility keeps decreasing week by week and now it is below 1%. Like for the Bund Futures the questions that many traders and investors are asking us are:

1) How low can volatility get?

2)When enough is enough?

3)Is there a bottom?

We still advise investors to watch their long positions!!! Bank your profits now and wait for the market to take a clear and defined direction. Usually, such a steep downtrend in volatility is a warning signal. In other words, the calm before the storm!!!

The staff of HyperVolatility is not waiting for a double dip however, given the immediate and fast rate of decrease in volatility, a downward retracement should be expected.

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