AlphaBlog, good post on market volatility

Here, by David Merkel

Volatility is a measure of price changes over time, in this case, but it would be prices changes over transactions in channel theory. The two are close enough for this discussion. When the 20 day average price converges with today's price, then we can conclude the stock traders have reached agreement on evaluation. When the convergence happens quite suddenly, this the traders are likely fixing something in the market itself. But when the price incongruity builds up over time, then traders are waiting for the industrial end of the economy to fix an evaluation.

The index today seems to show that whatever price adjustment was needed has occurred.