The SPX finished +4.9% for October, and is slightly positive for November so far. The ‘herd’ is all on the same side of the boat in that there is a ‘bubble’, but that the Fed will continue to inflate the markets and bail out the banks, so it is $85 billion QE per month or bust, and when it does it will be extremely ugly.
In addition to the never ending QE, it is also seasonally positive, so it will take some overt news/event etc to accelerate any downside correction other than a shallow pullback.
The last commentary was 10/23/13, and for 14 trading days from 10/25-11/13 the SPX has made a new cycle high at 1775.22 [10/30], and traded in a range from 1775.22-1755.72 other than a one day decline [-1.3%] to a 1746.30 low, only to be reversed +1.3% to next day.
The most opportunistic volatility band day trading price action in this Fed artificial market is when there is a gap down opening to VB levels, and even better when there is other symmetry that supports a positive trading decision at those levels.
I have included some specific recent trading examples from my Trading Service. MMM is one of our current Focus trading stocks, and in this specific example it declined to 124.90 on the 9:55AM doji signal bar with the -2.0 VB at 124.70, and the -1.5 VB at 125.06.
For those of you familiar with my High Probability-Low Stress method of trading, you know this as a Trap Door. The MMM entry above 125.10 had a sustained advance into the 126.33 high above the 8EMA before the trade was exited.
In the following example you see that SLB declined straight down to the 91.86 low on the 10:25AM bar, with the -1.5 VB at 92.08 The trade was initiated above the 91.99 signal bar high, with the 20DEMA at 92.25, which came into play again as the stock formed a basic 123 strategy where the 3 point entry is above 92.25, or the 123 continuation entry above the 2 point high.
By taking a free one-week trial to the Trading Service you will see the various trading screens, including the VB screens for the S&P 500 and the leading ETFs, in addition to viewing the daily basic strategy examples in the archives. There is also a section that explains using the VB`s.