I have noticed that when the Klinger Volume indicator reverses direction, but price remain relatively flat, as in this case, this is a sign that prices will continue in the same trend direction as is already in play, or prices will move sideways. This is a chart for corn today, which I have noticed that after trading higher overnight, has now reversed, and is trading below yesterday's settlement price (white dotted line).The Klinger Volume indicator, like the stochastic indicator, is extremely sensitive to subtle shifts in market sentiment and momentum. However, the stochastic is limited in its range, since it essentially goes flat once it moves above 80 (overbought) or below 20 (oversold). Thus, the stochastic indicator loses its effectiveness and utility in these areas. The Klinger+ATR indicator doesn't lose its effectiveness; it continues to function and serve as a leading indicator all the while.
On days like today where the market moves sideways, once volatility falls, a trader must stop trading until volatility rises again. Otherwise, a trader will give up gains by whittling his past earnings away slowly with small, losing trades that gradually destroy one's margin account. Remember Phantom's Rule #1! I consider this to be a correlary to Rule #1. Don't trade in a dead/sideways market!
Only soybeans continue to trade significantly higher for the day. Corn and wheat have both given up their overnight gains and are trading below yesterday's closing prices.
