The S&P 500 closed off its lows on Tuesday, November 1. The index settled at major support levels which, if they continue to hold, could pressage another shift toward new highs.
During the tumultous session, our fear gauges hit extremes. See the VIX and Put/Call (CPC) sections of the chart below.
We like to see both of these "fear" indicators hit relative extreme levels in order to help confirm whether the market trend is about to shift. Both closed at extremes on Tuesday. Although stochastics are not quite oversold, we consider this extreme reading in VIX/PutCall and the ability of the S&P 500 to settle at support, as positive indicators for equities.
The U.S. election certainly throws a wrench in the assessment of market conditions, and hedging bets prior to Election Day has likely been driving recent volatility.