Gold is up this morning and is going to keep going up, but I have something else to show you today. You see something is happening with the S&P 500, DOW, and Nasdaq that I have never seen before and I do not think anyone else has ever seen before either.

And what is crazy is no one is talking about it.

Yahoo Finance isn’t.

And Michael Santoli (the CNBC guy who drinks coffee all day and supervises market commentary and rants on twitter) just tweeted that he is on vacation.

And Jim Cramer didn’t say a word about it last night – NOT ONE.

So CNBC viewers have no clue to what is about to happen and have fallen asleep at the wheel again.

So take a look at this chart of the S&P 500 and the 20-day Bollinger Bands.

swanson

What Bollinger Bands measure are the real price volatility in a chart. A big move in price makes the Bollinger Bands go wide apart from one another, but when the moves get small and the daily moves get consistently smaller than the Bollinger Bands get closer together.

Periods of such low volatility lead to periods of high volatility.

This can happen when a market pauses for a few weeks after a big rally before another big rally begins or at a market top.

Last year in August the Bollinger Band width indicator for the 20-day Bollinger Bands fell below 2.5.

It had only gotten that low three times in all of the years I have been trading the markets and suggests that a big move was about to start that would shock people.

And so the market fell in a flash crap drop that did smash a lot of people.

That’s how serious it is when the Bollinger Bands get this narrow.

So yesterday the Bollinger Band width indicator got below 1.50.

This is probably the lowest reading in decades.

My data on stockcharts goes back to the mid 1990’s and I can’t find a reading for the S&P 500 this low.

What does this mean?

For one thing everyone is bullish on the market and many people are predicting a giant rally to start now that will go into the end of the year.

If you are watching CNBC you are seeing these predictions.

If these people are right the market needs to start to go up in a big way NOW.

And it needs to rally huge into Labor Day.

If the market does not do that then what we are witnessing is a big top much like the way gold stocks topped out in 2011.