Expect Anything in This Volatile Market
Here’s my contribution: a simply staggering chart of the S&P and its Bollinger Bands across this year. You can read more about Bollinger Bands here and how to use them in trading — but in a nutshell, this indicator is meant to show (generally and, yes, imperfectly) the range you can expect an investment to trade within.
Check out how fat the Bollinger Bands for the SPDR S&P 500 ETF (NYSE:SPY) have gotten since this summer — showing how big a range investments can move in before breaking the Bollinger pattern. Most noteworthy is a simply amazing range of about 108 to 142 for the fund as the market went haywire in August. What’s the point of having a predictive indicator at all if your prediction is that the market might move up 20%, down 20% or anything in between?