Food for thought: From "Sentimentrader.com" Bollinger Bands are a very popular indicator, available on most quote packages. It puts âbandsâ around a stock or index which are usually 2 standard deviations from the 20-day moving average (those are usually the default settings - you can change them to whatever you wish). The Bands give you a good, quick look at how volatile a stock or index has been. Using those parameters on the S&P, there is a difference of only 22 points between the upper and lower Bands â a sign that volatility (on a closing basis) has been very, very low. So low, in fact, that we havenât seen the Bands this tight in nearly 10 years. Weâve been conditioned to think that periods of low volatility lead to periods of high volatility. Whatâs interesting, though, is that there have been 354 other days in the history of the S&P 500 when the Bands have been extremely tight. Over the next 20 trading days, the S&P saw a one-day move of 1% or more (up or down) on average only 1 time. During any other random period, we would expect about 4 days with 1% moves in any given 20-day period. Traders are becoming very anxious to jump on the next prevalent trend, suggesting a sharp move could be in the works, but this history with the Bollinger Bands tells us that we may be in for more days with relatively small daily changes.