Volatility on the S&P 500 is visibly “compressing” according to technical analysts – BTIG writes that the index is literally “a stretched spring” and that the weekly Bollinger Bands are the narrowest since 2019, which often precedes a larger move in the coming weeks. The direction isn’t guaranteed by that alone, but BTIG has a rather positive outlook: if the market holds above the 7,000 level, it sees room up to roughly 7,200 in the coming months.

- Bollinger Bands are a technical indicator that measures volatility and the relative “expensiveness” of a price compared to its average. They’re mainly used to estimate whether the market is short-term overbought, oversold, or preparing for a larger move.

They also mention that in the short term large growth names – mega-caps and growth ETFs – can make sense: they’ve pulled back to the rising 200-day moving average and are holding support there for now, which some view as a “decent entry.” On the other hand, they warn about one weakness: software – if this part of the market doesn’t convincingly recover from the recent wobble, it could drag the entire index down.

Are you currently in “buy-the-dip” mode (mega-cap/growth), or do you prefer to wait for confirmation of a breakout above 7,000 – or perhaps for a fake-out and a better price?