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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 680.27

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Dec 1 4:00 PM EST

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To: donald sew who wrote (24920)	9/5/1999 12:36:00 PM
From: Matthew L. Jones	Read Replies (1) of 99985

Don (and Dave), This "pinch" in the Bollinger bands is merely an indication of a period of abnormal involatility. As most T/A are aware, a lack of volatility usually precedes a breakout in one way or another. I think (imho) that the key to determining the direction of the breakout is best left to the other technical indicators. As John Bollinger would tell you, his bands are formulated by calculating typically 2 standard deviations above and below a moving average (typically 20 day). As volatility decreases, the bands tighten. Matt

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