To understand the time element of technical analysis one has to understand what makes a market change direction. On the surface we can all go back to Econ 101 and say the supply/demand perspective changed and that is true. But that is not always the case.
October was the third month in 2014 in which monthly average daily volume in VIX futures reached a new all-time high. The record 323,761 contracts per day in October surpassed the previous high of 216,996 contracts in August 2014.
Only four months since 1950 has the S&P 500 fallen by at least 7% only to close higher on the month. That’s exactly what happened in October – a record month for major stock indices and options volume.