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Here’s how to decide whether the S&P 500 is now heading toward a correction

·9 min read
Here’s how to decide whether the S&P 500 is now heading toward a correction
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The S&P (SPX) had risen so fast since Oct. 13, and especially since breaking out to new all-time highs on Oct. 25, that there really isn’t much support near current levels. The rapid rise in stock prices had moved SPX above the +4σ “modified Bollinger Band” (mBB), and it walked up the outside of that Band from Oct. 26 to Nov. 9, a period of 11 trading days – quite a long time to be outside of the +4σ Band. Hence, we prefer that signal to be confirmed – and that confirmed signal is what we call a McMillan Volatility Band (MVB) sell signal.