Extremely Rare Volatility Signal Says A Big S&P 500 Move May Be Coming

bear-market--My Comments: More potential woe and gloom for those with money in the markets. Will it happen today? It may have started last Friday, but who knows.

There are a lot of charts shown which I’ve elected not to include here. Instead I’m giving you a link at the bottom so you can follow it yourself and see what the author is talking about.

There are competing metrics for guessing the markets; fundamental and technical. Neither is right all the time; it is instead a different philosophy of choosing how best to respond to changes on any given day. This one is from the technical camp.

I’m encouraging all clients to put their investments either in cash or on a platform that allows an inverse position that typically makes money in a downturn. It’s your call.

Big Moves Often Follow

Regular viewers of CCM’s weekly videos may be familiar with the expression “the longer a market goes sideways, the bigger the move you tend to get after a breakout or breakdown”, which aligns with the concept of periods of low volatility often being followed by big moves in asset prices.

Lowest Level Dating Back To 1982

Bollinger band width is one way to track relative volatility. When Bollinger band width readings hit extremely low levels, it tells us to be open to a big move. The S&P 500’s daily Bollinger Band width has never been lower than it is today, using data back to 1982, which means a big move could be coming soon in stocks.