Bollinger Bands and TRENDING market
If upper and Bollinger bands either converge ... or diverge ..., does that mean the market is TRENDING? No - Bollinger bands measure volatility, which is an measure of how much variation there is in the price of the instrument. It does not indicate a trend which means that the instrument tends to move in a consistent direction.  When Bollinger bands are close together, that means volatility is relatively low, and vice-versa. They can  be interpreted as signals that a stock might move in one direction or the other, but they are not a measure of directional movement. If upper and bollinger bands either converge (both bands are getting more and more close together) or diverge (both bands are getting more and more away from each other), does that mean the market is TRENDING? The answer is no. The divergence or convergence of BB-upper & lower band does not indicate if the market is trending or not. It only indicated if volatility is increasing or decreasing. Or is market trending only in case if both bands, upper and lower, are parallel and at the same time NOT horizontal? The answer is yes. To understand the reason consider that BB is constructed from a central Moving Average along with standard deviation. Upper Band=MA+2*SD, Lower Band=MA-2*SD. A moving average is a trend following indicator and volatility has nothing to do with trend (as SD only measures the price movement around the mean). Which essentially means BB has trend following qualities. The upper and lower bands remain more or less parallel in between band contraction and expansion. Refer below:   You shall see distinctly phases when BB bands are not parallel and are parallel and not horizontal. As mentioned above, when BB bands are expanding or contracting they do not give indication of the trend direction. When they are parallel, close or apart and not horizontal, they provide a good directional bias through the general slope. Though a more effective method to determine trend and its direction is the central MA of BB. Again, refer below:  Here you can see that some portion of the bands are parallel and more or less horizontal. The price action would tell you that the stock is now range-bound as opposed to trending. The primary use of the BB bands are to gauge volatility as @misantroop stated. The primary trend direction is usually derived from the central MA. Bollinger Bands are placed standard deviations away from the moving average. Therefore if the price is volatile, the bands diverge from the mean. During consolidation the bands would converge. They do not provide a clear indication of whether the price is trending or not.
No, it is just normal sideways action.  Think of this week kind of like October 14th - October 20th. It is a day traders week. If you're not day trading then either do after hours trading at the second of the news, or buy/sell on thursday (i'm bullish).  This is normal market activity. I wouldn't consider it out of the ordinary. When there is sideways action there is always good times to both buy and sell, if you realize it. For example, today is the perfect day to buy ... maybe when $SPX is 1240-1244. In order to see whether you can buy or sell some given quantity of a stock at the current bid price, you need a counterparty (a buyer) who is willing to buy the number of stocks you are wishing to offload. To see whether such a counterparty exists, you can look at the stock's order book, or level two feed. The order book shows all the people who have placed buy or sell orders, the price they are willing to pay, and the quantity they demand at that price. Here is the order book from earlier this morning for the British pharmaceutical company, GlaxoSmithKline PLC.  Let's start by looking at the left-hand blue part of the book, beneath the yellow strip. This is called the Buy side. The book is sorted with the highest price at the top, because this is the best price that a seller can presently obtain. If several buyers bid at the same price, then the oldest entry on the book takes precedence. You can see we have five buyers each willing to pay 1543.0 p (that's 1543 British pence, or £15.43) per share. Therefore the current bid price for this instrument is 1543.0. The first buyer wants 175 shares, the next, 300, and so on. The total volume that is demanded at 1543.0p is 2435 shares. This information is summarized on the yellow strip: 5 buyers, total volume of 2435, at 1543.0. These are all buyers who want to buy right now and the exchange will make the trade happen immediately if you put in a sell order for 1543.0 p or less. If you want to sell 2435 shares or fewer, you are good to go. The important thing to note is that once you sell these bidders a total of 2435 shares, then their orders are fulfilled and they will be removed from the order book. At this point, the next bidder is promoted up the book; but his price is 1542.5, 0.5 p lower than before. Absent any further changes to the order book, the bid price will decrease to 1542.5 p. This makes sense because you are selling a lot of shares so you'd expect the market price to be depressed. This information will be disseminated to the level one feed and the level one graph of the stock price will be updated. Thus if you have more than 2435 shares to sell, you cannot expect to execute your order at the bid price in one go. Of course, the more shares you are trying to get rid of, the further down the buy side you will have to go. In reality for a highly liquid stock as this, the order book receives many amendments per second and it is unlikely that your trade would make much difference. On the right hand side of the display you can see the recent trades: these are the times the trades were done (or notified to the exchange), the price of the trade, the volume and the trade type (AT means automatic trade).  GlaxoSmithKline is a highly liquid stock with many willing buyers and sellers. But some stocks are less liquid. In order to enable traders to find a counterparty at short notice, exchanges often require less liquid stocks to have market makers. A market maker places buy and sell orders simultaneously, with a spread between the two prices so that they can profit from each transaction. For instance Diurnal Group PLC has had no trades today and no quotes. It has a more complicated order book, enabling both ordinary buyers and sellers to list if they wish, but market makers are separated out at the top. Here you can see that three market makers are providing liquidity on this stock, Peel Hunt (PEEL), Numis (NUMS) and Winterflood (WINS). They have a very unpalatable spread of over 5% between their bid and offer prices. Further in each case the sum total that they are willing to trade is 3000 shares. If you have more than three thousand Dirunal Group shares to sell, you would have to wait for the market makers to come back with a new quote after you'd sold the first 3000. a) the quick answer to your correlation is quantitative easing. basically the central bank has been devaluing the US dollar, making the prices of all goods increase (including stocks.)  the stock market appear to have recovered from 2009 lows but its mainly an illusion. anyway the QE packages are very known when the correlation is not there, that means other meaningful things are happening such as better corporate earnings and real growth. b) the thinkorswim platform has charts for dollar futures, symbol /dx No, and using a 37 year old formula in finance that is as simple as: should make it obvious technical analysis is more of a game for retail traders than investment advice. When it comes to currencies, there are a myriad of macroeconomic occurrences that do not follow a predictable timescale. Using indicators like RSI on any time frame will not magically illuminate broad human psychology and give you an edge. It is theoretically possible for a single public stock's price to be driven by a range of technical traders who all buy at RSI 30 and sell at RSI 70, after becoming a favorite stock on social media, but it is infinitely more likely for all market participants to have completely different goals. Most reflationary policies are talking about stopping, so hopefully in 2018 the CBs will stopping buying so much. BOJ is rethinking their policy of buying treasuries when our US yields start to rise (to shrink them and protect their currency).  So hopefully once we get past global QE, things can get back to a more “normal” status.  As far as advice on finding value...err...good luck?  [Growth of Monetary Base and M2 chart in article](https://www.google.com/amp/s/seekingalpha.com/amp/article/4113280-federal-reserve-never-printed-money-part)   Also look at how the money multiplier is shrinking. "The Securities Industry and Financial Markets Association (SIFMA) publishes these and other relevant data on their Statistics page, in the ""Treasury & Agency"" section. The volume spreadsheet contains annual and monthly data with bins for varying maturities. These data only go back as far as January 2001 (in most cases). SIFMA also publishes treasury issuances with monthly data for bills, notes, bonds, etc. going back as far as January 1980. Most of this information comes from the Daily Treasury Statements, so that's another source of specific information that you could aggregate yourself. Somewhere I have a parser for the historical data (since the Treasury doesn't provide it directly; it's only available as daily text files). I'll post it if I can find it. It's buried somewhere at home, I think." I don't think retail cares so much about being taken for a few bps here and there, but more so about the insane volatility that is the new normal in markets. This vol., which in many cases can be tracked back to HFT, has had a negative feedback loop that resulted in lower volumes across the board.  I don't think retail cares about a few bps here and there, but if the entire system is based on trust in market efficiency, and computers make them less efficient by purposefully manipulating the system, retail might just not chose to play any more.  Think of it like baseball vs. football.  Football has salary caps, and, as such, all teams have a fair shot at winning every year, baseball doesn't, and a few teams with the biggest budgets consistently win year over year. Yeah, it's great if you're a Yankees, Red Sox, Giants or Phillies fan, but many other cities in the country don't care about baseball much anymore and favor football. Look at viewership stats by market over time. HFT is the same way, it's great if you have the money to compete in that system, but by destroying the integrity of the system itself, many participants just stop caring as much and go elsewhere... Yes it is possible but with a caveat.  It is a pattern that can be observed in many lightly traded stocks that usually have a small market cap.  I am talking about a stock that trades less than 2,000 shares per day on average. Agree with some of the posts above - Barchart is a good source for finding unusual options activity and also open interest -https://www.barchart.com/options/open-interest-change "There are stocks that have held 100% of the exact same trend (bull or bear) on a date or date range for years. While  history of course doesn't guarantee that the trend will hold for the current year, that fact itself is distinct from the question of whether history is an *indicator* worth building a thesis off of.  The problem is if and when someone thinks ""indicator"" is equivalent to ""definitive answer"".   Answer 2: A dozen big algo traders have disproven this notion.  Answer 3: Price is not only price action itself. It's calendar, evens, binaries, cyclical psychology, etc." "Since these indices only try to follow VIX and don't have the underlying constituents (as the constituents don't really exist in most meaningful senses) they will always deviate from the exact numbers but should follow the general pattern. You're right, however, in stating that the graphs that you have presented are substantially different and look like the indices other than VIX are always decreasing. The problem with this analysis is that the basis of your graphs is different; they all start at different dates... We can fix this by putting them all on the same graph:  this shows that the funds did broadly follow VIX over the period (5 years) and this also encompasses a time when some of the funds started. The funds do decline faster than VIX from the beginning of 2012 onward and I had a theory for why so I grabbed a graph for that period. My theory was that, since volatility had fallen massively after the throes of the financial crisis there was less money to be made from betting on (investing in?) volatility and so the assets invested in the funds had fallen making them smaller in comparison to their 2011-2012 basis.  Here we see that the funds are again closely following VIX until the beginning of 2016 where they again diverged lower as volatility fell, probably again as a result of withdrawals of capital as VIX returns fell. A tighter graph may show this again as the gap seems to be narrowing as people look to bet on volatility due to recent events. So... if the funds are basically following VIX, why has VIX been falling consistently over this time? Increased certainty in the markets and a return to growth (or at least lower negative growth) in most economies, particularly western economies where the majority of market investment occurs, and a reduction in the risk of European countries defaulting, particularly Portugal, Ireland, Greece, and Spain; the ""PIGS"" countries has resulted in lower volatility and a return to normal(ish) market conditions. In summary the funds are basically following VIX but their values are based on their underlying capital. This underlying capital has been falling as returns on volatility have been falling resulting in their diverging from VIX whilst broadly following it on the new basis." As others have pointed out, the value of Apple's stock and the NASDAQ are most likely highly correlated for a number of reasons, not least among them the fact that Apple is part of the NASDAQ. However, because numerous factors affect the entire market, or at least a significant subset of it, it makes sense to develop a strategy to remove all of these factors without resorting to use of an index. Using an index to remove the effect of these factors might be a good idea, but you run the risk of potentially introducing other factors that affect the index, but not Apple. I don't know what those would be, but it's a valid theoretical concern.  In your question, you said you wanted to subtract them from each other, and only see an Apple curve moving around a horizontal line. The basic strategy I plan to use is similar but even simpler. Instead of graphing Apple's stock price, we can plot the difference between its stock price on business day t and business day t-1, which gives us this graph, which is essentially what you're looking for:  While this is only the preliminaries, it should give you a basic idea of one procedure that's used extensively to do just what you're asking. I don't know of a website that will automatically give you such a metric, but you could download the price data and use Excel, Stata, etc. to analyze this.  The reasoning behind this methodology builds heavily on time series econometrics, which for the sake of simplicity I won't go into in great detail, but I'll provide a brief explanation to satisfy the curious. In simple econometrics, most time series are approximated by a mathematical process comprised of several components: In the simplest case, the equations for a time series containing one or more of the above components are of the form that taking the first difference (the procedure I used above) will leave only the random component. However, if you want to pursue this rigorously, you would first perform a set of tests to determine if these components exist and if differencing is the best procedure to remove those that are present. Once you've reduced the series to its random component, you can use that component to examine how the process underlying the stock price has changed over the years. In my example, I highlighted Steve Jobs' death on the chart because it's one factor that may have led to the increased standard deviation/volatility of Apple's stock price. Although charts are somewhat subjective, it appears that the volatility was already increasing before his death, which could reflect other factors or the increasing expectation that he wouldn't be running the company in the near future, for whatever reason. My discussion of time series decomposition and the definitions of various components relies heavily on Walter Ender's text Applied Econometric Time Series. If you're interested, simple mathematical representations and a few relevant graphs are found on pages 1-3. Another related procedure would be to take the logarithm of the quotient of the current day's price and the previous day's price. In Apple's case, doing so yields this graph:  This reduces the overall magnitude of the values and allows you to see potential outliers more clearly. This produces a similar effect to the difference taken above because the log of a quotient is the same as the difference of the logs The significant drop depicted during the year 2000 occurred between September 28th and September 29th, where the stock price dropped from 26.36 to 12.69. Apart from the general environment of the dot-com bubble bursting, I'm not sure why this occurred. Another excellent resource for time series econometrics is James Hamilton's book, Time Series Analysis. It's considered a classic in the field of econometrics, although similar to Enders' book, it's fairly advanced for most investors.  I used Stata to generate the graphs above with data from Yahoo! Finance: There are a couple of nuances in this code related to how I defined the time series and the presence of weekends, but they don't affect the overall concept. For a robust analysis, I would make a few quick tweaks that would make the graphs less appealing without more work, but would allow for more accurate econometrics. That is called a 'volume chart'. There are many interactive charts available for the purpose. Here is clear example.  (just for demonstration but this is for India only) 1) Yahoo Finance 2) Google Finance 3) And many more Usually, the stock volume density is presented together (below it) with normal price vs time chart. Note: There is a friendly site about topics like this. Quant.stackexchange.com. Think of checking it out. NUGT and DUST both track GDX with triple leverage, but in opposite directions. GDX has been rising steadily throughout 2016, and certainly since over the last month. DUST experiences much higher volume when GDX is in a downward trend, as it was from 2013-2016. I think you'll see the same thing with DRIP and GUSH when oil has been moving steadily in one direction or the other. This is really a reflection of the herd mentality to jump in when things look like they're going a particular direction. I use StockCharts for spread charting. To take your question as an example, here is the chart of Apple against Nasdaq.