« Notable Charts 050616 | Main | Notable Charts 050620 »
June 16, 2005
Dow Dulls
Looking at the Dow’s Bollinger Bands, I get the strange feeling that something is about to happen in this DULL trading range. The Bollinger Band width is at its lowest level in over 15 years as the Dow trades within a 170 point range the last 19 days. Such contractions usually precede an increase in volatility and lead to a significant breakout. Bollinger himself notes that there is often a head fake (false breakout) and then a good directional move in the opposite direction of the head fake. I am not smart enough to predict head fakes and will simply take the breaks as they come. A move above 10600 is bullish and opens the door to 11000, while a move below 10400 is bearish and opens the door to a break below 10000. INDU
Posted by Arthur B. Hill at June 16, 2005 04:47 PM