"Taking stock of indices" (Active Trader, October 2006) analyzed how the behavior of four major American stock indexes — the S&P 500 (SPX), S&P 400 (MID), Nasdaq 100 (NDX), and Russell 2000 (RUT) — had changed over time. In a nutshell, they were all less volatile than three to five years ago, and all of them except the Russell 2000 were exhibiting much less trendiness than a few years ago.

This article continues to explore the volatility ideas from "Taking stock of indices" to see if they can be used to create a trading strategy, or at least a bit of trading logic (such as a trend or volatility filter) that can be used as a part of a trading strategy.