_avid_trader_ . . Wed, Jul 12, 8:11PM ET (-0500 GMT)
Please welcome tonight's chat with our special guest, John Bollinger. John is currently best known for having created the "Bollinger Band" technical indicator used by many analytical software programs, and for his weekly guest appearances with Ron Insana on CNBC... Please post any topical questions that you may have. They will be addressed where possible, on a first-in / first-out basis, possibly with similar questions that may have been posted in the interim. Please refrain from any other discussion during the chat. Thank you.

John_Bollinger . . Wed, Jul 12, 8:12PM ET (-0500 GMT)
I think seasonal trends will carry the market higher over the next several weeks at which time we will transition to a flat market in preparation for a decline into the fall lows.

_avid_trader_ . . Wed, Jul 12, 8:13PM ET (-0500 GMT)
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grizzly . . Wed, Jul 12, 8:13PM ET (-0500 GMT)
john, how do you read the last month of Adv/dec line?

_avid_trader_ . . Wed, Jul 12, 8:13PM ET (-0500 GMT)
John -- Do you have any price targets for the upside?

John_Bollinger . . Wed, Jul 12, 8:14PM ET (-0500 GMT)
No I do not believe in price targets generally. Rather my focus is on trend determination and juncture recognition.

lioness . . Wed, Jul 12, 8:14PM ET (-0500 GMT)

John_Bollinger . . Wed, Jul 12, 8:14PM ET (-0500 GMT)
Which is to say I am primarily interested in trends and terms.

tfast . . Wed, Jul 12, 8:15PM ET (-0500 GMT)
Clap, Clap ,Clap...If using bb's on a very short time frame, what is the best setting, Also what do you use for verification of this

12345abc . . Wed, Jul 12, 8:16PM ET (-0500 GMT)
Mr. Bollinger, referring to the st. deviation of your bands, did you ever consider having the top band be different from the bottom band? Thanks.

John_Bollinger . . Wed, Jul 12, 8:16PM ET (-0500 GMT)
Grizzly: I think the AD line improvement is due to a shift in focus to midcap and small cap stocks. However, the AD line has been problematic and should only be used for relatively short term comparisons rather than overall trend information.

lmarsh . . Wed, Jul 12, 8:16PM ET (-0500 GMT)
Avid Trader: Thanks, I read the tips & faqs. sorry for the trouble. I'll hush & enjoy the Chat now. :^)

grizzly . . Wed, Jul 12, 8:17PM ET (-0500 GMT)
john_b, I think you do sector analysis.... do you see semis and biotechs remaining strong? Do they have seasonal top out periods?

nige . . Wed, Jul 12, 8:18PM ET (-0500 GMT)
Soup, I know you've got trapped in a short. I've been caught like that also. I really thought that people had realised Nasdoggie was at daft levels and were slowly escaping.

John_Bollinger . . Wed, Jul 12, 8:18PM ET (-0500 GMT)
Tfast: On daily charts 10 days and 1 1/2 standard deviation is as short as you can get. For shorter periods you would need to go to hourly, half hour, or shorter bars.

nige . . Wed, Jul 12, 8:18PM ET (-0500 GMT)
Oops, sorry, didn't see the time.

rodsteel . . Wed, Jul 12, 8:18PM ET (-0500 GMT)
Mr. Bollinger, please pardon my ignorance but, re: bollinger bands, is a std dev of 234 appropriate for a len of 34 and what std dev would be used for a len of 136?

lioness . . Wed, Jul 12, 8:19PM ET (-0500 GMT)
Mr. Bollinger if the market does make a summer top then trades lower into what range, back towards the lows made in February for the S&P;, or lower?

John_Bollinger . . Wed, Jul 12, 8:20PM ET (-0500 GMT)
12345abcde: In the late 70's Marc Chaikin developed Bomar Bands which are spread asymetrically above and below an average. These bands were very useful but I believe the need for asymetricality is reduced by the use of volatility as the bandwidth measure. This is because the bands are so adaptive to recent price action.

John_Bollinger . . Wed, Jul 12, 8:23PM ET (-0500 GMT)
Lioness: If the market does top out mid to late summer and then trade into a meaningful fall low, the depth of that decline will most likely be determined by a combination of interest rates and fundimental data. The fundimental data that is of most interest in this regard are earning reports. We are just starting into reporting season and we want to see two positive reports for every negative report on average. Anything less than that would suggest a meaningful fall decline and chance that the Febuary lows might not hold.

12345abc . . Wed, Jul 12, 8:24PM ET (-0500 GMT)
Mr. Bollinger, thank you. I use your bands as a major component of my self developed trading system.

John_Bollinger . . Wed, Jul 12, 8:26PM ET (-0500 GMT)
Grizzly: It is true that individual sectors have seasonality that differs from the market. However, in this time frame I believe the market's seasonality will be a more important factor than sector influences. For all intents and purposes, when the market transitions from its rally phase all sectors should be seen as a source of funds except those that exhibit high absolute strength.

rowdy . . Wed, Jul 12, 8:27PM ET (-0500 GMT)
john.. how does gold look?

John_Bollinger . . Wed, Jul 12, 8:27PM ET (-0500 GMT)
Playing the relative strength game in a flat to downward market is very dangerous. As we transition from a positive market the focus needs to shift from relative strength to absolute strength with sectors being sold even if they exhibit high relative strength if they do not exhibit good absolute strength.

traderhugh . . Wed, Jul 12, 8:28PM ET (-0500 GMT)
Mr. Bollinger.. I have been following your work for some time now and I think I've detected a pattern when the price jumps above the upband it usually continues for a bit. Have you done any studies that would suggest that it might be a good "buy" trigger?

_avid_trader_ . . Wed, Jul 12, 8:28PM ET (-0500 GMT)
rodsteel -- could you rephrase your question?

John_Bollinger . . Wed, Jul 12, 8:28PM ET (-0500 GMT)
rowdy: gold doesn't look too good.

rose_32008 . . Wed, Jul 12, 8:29PM ET (-0500 GMT)
Mr Bollinger, my satellite service only recently began carrying CNBC. When can I find you there?

_avid_trader_ . . Wed, Jul 12, 8:29PM ET (-0500 GMT)
John -- A question emailed in by a chat member who could not be present this evening: "Today's SPX bumped up against the upper B-Band (20 avg periods and Sigma factor of 2 in my AIQ program). Do you see an immediate break higher or resistance and why?"

perspect . . Wed, Jul 12, 8:30PM ET (-0500 GMT)
Or alternatively, can you suggest ways to try to determine when the price WILL stick to a rising/falling band, and when it will not?

grizzly . . Wed, Jul 12, 8:30PM ET (-0500 GMT)
tradehugh, that is the basis for Keith Fitschen's commodity program "aberration"

rodsteel . . Wed, Jul 12, 8:31PM ET (-0500 GMT)
On livecharts there are two parameters for BB's (len and std dev) for a len of 34 is std dev of 234 appropriate and for a len of 136 what is a good std dev?

John_Bollinger . . Wed, Jul 12, 8:31PM ET (-0500 GMT)
traderhugh: Breaks of the bands are in general continuation signals and not sell signals. In our video tape of our seminar we present a trading system based on strength near the upper bands coupled with indicator confirmation. At www.BollingerBands.com we have a free tutorial on Bollinger Bands that explains them in detail and which indicators to use for confirmation.

traderhugh . . Wed, Jul 12, 8:32PM ET (-0500 GMT)
Grizzly.. where can I find out more about that program?? t/u

avllama . . Wed, Jul 12, 8:32PM ET (-0500 GMT)
john, do you think oil and other oil products will also see a fall decline or will they hang until next spring?

traderhugh . . Wed, Jul 12, 8:33PM ET (-0500 GMT)
Mr. Bollinger t/u

John_Bollinger . . Wed, Jul 12, 8:33PM ET (-0500 GMT)
Rose_32008: You can find me on CNBC on Tuesday 3:30 ET time.

avllama . . Wed, Jul 12, 8:33PM ET (-0500 GMT)
john, do you think oil and other oil products will also see a fall decline or will they hang until next spring?

lmarsh . . Wed, Jul 12, 8:34PM ET (-0500 GMT)
John thanks for the website address! will have to check it out.

rose_32008 . . Wed, Jul 12, 8:34PM ET (-0500 GMT)
Thank you Mr Bollinger. I work, but the VCR will be ready to go next week.

grizzly . . Wed, Jul 12, 8:34PM ET (-0500 GMT)
traderhugh, it is often near the top of the list for systems in 'futures truth'... very simple system.

John_Bollinger . . Wed, Jul 12, 8:34PM ET (-0500 GMT)
Avid: Regarding SPX, strength sufficient to tag the upper band is not a sell signal as long as it is confirmed by indicator action. As you are using AIQ software, check the volume indicators for confirmation. I think you will be satisfied that today's strength is a continuation signal.

theguru . . Wed, Jul 12, 8:35PM ET (-0500 GMT)
mr. bollinger- as a big fundamentalist i am starting to see technical theory hold more and more. as technical analysis becomes more popular one can argue that it is becoming almost like a self fulfilled prophecy. any comments

traderhugh . . Wed, Jul 12, 8:35PM ET (-0500 GMT)
Mr. Bollinger.. are there any other websites that you could give us that would help us become better traders??

John_Bollinger . . Wed, Jul 12, 8:36PM ET (-0500 GMT)
Rodsteel: I cannot answer for livecharts, but the standard defaults for Bollinger Bands are a 20 day moving average and a 2 standard deviation bandwidth.

roger34 . . Wed, Jul 12, 8:36PM ET (-0500 GMT)
Well, isn't this a bonus this week. Greetings from Vancouver. John, it is always a pleasure to see you on CNBC. You have a supurb presence on television and your bands stand by themselves. I use them on the 1, 5 and 21 min on the eminis amongst other things. Thank you ever so much for your work. I agree with your short term analysis. You have courage to come on the same time "Survivor" is on in the East. If we wanted to learn more about Bollenger Bands, where would we go?

grizzly . . Wed, Jul 12, 8:37PM ET (-0500 GMT)
traderhugh, I own it.... email me at mjj3@mindspring.com and I'll answer any questions. I gotta scoot... THANKS JOHN! ~~~poof~~~

John_Bollinger . . Wed, Jul 12, 8:37PM ET (-0500 GMT)
Traderhugh: I developed www.EquityTrader.com which rates 3300 charts using a fuzzy logic model that used 54 rules. I think it has great charts and is a good source for trading ideas and a second opinion before you trade.

rodsteel . . Wed, Jul 12, 8:38PM ET (-0500 GMT)
My question is if you change the standard moving average how do you pick the std deviation?

John_Bollinger . . Wed, Jul 12, 8:39PM ET (-0500 GMT)
avllama: For the time being I think that oil prices are at or near equilibrium, a level that should be very conducive to oil company profitability and I believe that energy stocks should be bought on any pullbacks until some factor comes into the market to upset equilibrium.

traderhugh . . Wed, Jul 12, 8:40PM ET (-0500 GMT)
Mr. Bollinger: I am becoming interested in the concept of "rolling stocks". Would you have any suggestions as to where I might explore? T/U Coming at you from Toronto, Ontario, Canada

avllama . . Wed, Jul 12, 8:41PM ET (-0500 GMT)
The factor meaning some oil cartel nation seriously cheating on their quota or the cartel collective loosening up contraints?

grizzly . . Wed, Jul 12, 8:41PM ET (-0500 GMT)
john, is there a trading record or percentage of winners associated with that fuzzy logic picking system?? or is there a rule of thumb that the stocks that screen high on your list tend to return X% over the X time? I'll scroll for your answer...

outlaw . . Wed, Jul 12, 8:41PM ET (-0500 GMT)
John... what other indicator would you suggest to use in conjunction with the BB for intraday traders?

John_Bollinger . . Wed, Jul 12, 8:41PM ET (-0500 GMT)
Roger34: Thanks for the compiments. There is a tutorial available on www.BollingerBands.com that should answer your basic questions but you might want to examine the video available from the same site.

John_Bollinger . . Wed, Jul 12, 8:42PM ET (-0500 GMT)
Rodsteel: The generic answer to your question is as you shorten the bands you must reduce the number of Standard Deviations you use.

John_Bollinger . . Wed, Jul 12, 8:42PM ET (-0500 GMT)
TheGuru: That is true about everything in life.

John_Bollinger . . Wed, Jul 12, 8:44PM ET (-0500 GMT)
Outlaw: If volume is available for the items you trade I would suggest trying to adapt a volume indicator such as MFI or intra day intensity. However a lot is going to depend upon your data feed and software.

roger34 . . Wed, Jul 12, 8:44PM ET (-0500 GMT)
John, received the answer above. Does your default work as well on smaller time frames or should they be adjusted?

John_Bollinger . . Wed, Jul 12, 8:45PM ET (-0500 GMT)
traderhugh: I am not familiar with the concept of rolling stocks

theguru . . Wed, Jul 12, 8:45PM ET (-0500 GMT)
mr. bollinger my second question is since knowing nothing about the subject can you give me a good starting point. a book or website? Thank you

rodsteel . . Wed, Jul 12, 8:45PM ET (-0500 GMT)
Mr. Bollinger, thanks, I was hoping for specific std deviation numbers for the moving averages of 34 and 136?

John_Bollinger . . Wed, Jul 12, 8:46PM ET (-0500 GMT)
Avllama: Exactly, or perhaps some factor of which we are completely unaware yet.

updown . . Wed, Jul 12, 8:46PM ET (-0500 GMT)
John, do you think bonds go lower from here?

12345abc . . Wed, Jul 12, 8:46PM ET (-0500 GMT)
Mr. Bollinger, for a beginning technical analyst, would you recommend joining the Market Technician's Association as an associate?

John_Bollinger . . Wed, Jul 12, 8:47PM ET (-0500 GMT)
Grizzly: On each chart there is a history of the rankings below the chart and the volume bars. It will show you how accurate the rankings were in relation to price action for the security in question.

John_Bollinger . . Wed, Jul 12, 8:48PM ET (-0500 GMT)
Roger: see my answer to rodsteel please

John_Bollinger . . Wed, Jul 12, 8:49PM ET (-0500 GMT)
12345abc: Joining the MTA as an associate would be a good idea, but more importantly I think you should try to find a local group that reflected your investment philosophy.

_avid_trader_ . . Wed, Jul 12, 8:49PM ET (-0500 GMT)
John -- Another question emailed in earlier today: "Have you ever noticed a period when spoos were breaking above or below a band but most sectors were not? That is what my limited work is showing. Thank you for your answer in advance."

perspect . . Wed, Jul 12, 8:50PM ET (-0500 GMT)
Mr Bollinger: Many people here are VERY short term oriented. So, would it be true to say that if on a daily chart a 20 day moving average goes with 2 SDs, then also for a five minute chart one would also use 2 SDs with a 20 period moving average?

John_Bollinger . . Wed, Jul 12, 8:50PM ET (-0500 GMT)
updown: I suspect that the peak in long term rates is behind us but the peak in short term rates may be in front of us.

outlaw . . Wed, Jul 12, 8:50PM ET (-0500 GMT)
John, do you trade against the BB's. For example, if the BB's are trending up and the px breaks the rising lower band, do you sell or short the stock and visa versa?

John_Bollinger . . Wed, Jul 12, 8:53PM ET (-0500 GMT)
perspect: Generally 2 SDs are correct at 20 periods. However one must be careful to select one's bar length so that it has some relationship to the underlying trading dynamic. In other words, fit your bar length to reality and then worry about Bollinger Bands.

John_Bollinger . . Wed, Jul 12, 8:55PM ET (-0500 GMT)
Outlaw: I use indicators to answer that question. If the tags of the band are confirmed I take one action. If they are unconfirmed I may take another action.

John_Bollinger . . Wed, Jul 12, 8:56PM ET (-0500 GMT)
In closing keep a good watch on the energy stocks. Thank you for joining me tonight and visit www.EquityTrader.com and www.FundsTrader.com. Both have help sections that explain how to use the features of the site. Good Night.

_avid_trader_ . . Wed, Jul 12, 8:57PM ET (-0500 GMT)
John -- On behalf of everyone here tonight, thank you very much for taking the time to appear. And our thanks to all who participated in tonight's chat.

perspect . . Wed, Jul 12, 8:57PM ET (-0500 GMT)
Many thanks, John.

rose_32008 . . Wed, Jul 12, 8:57PM ET (-0500 GMT)
Thank you Mr Bollinger. Goodnight

outlaw . . Wed, Jul 12, 8:58PM ET (-0500 GMT)
Thank you, John for a valuable and interesting session. :-)))

lmarsh . . Wed, Jul 12, 8:58PM ET (-0500 GMT)
John, what are your favorite indicators to use with bollinger bands to get signals from?

lmarsh . . Wed, Jul 12, 8:59PM ET (-0500 GMT)
oops, guess i was late in asking.

dougie . . Wed, Jul 12, 8:59PM ET (-0500 GMT)
Thanks for sharing, John.

perspect . . Wed, Jul 12, 8:59PM ET (-0500 GMT)
OK Nige, you can come out again now : ^ )

jarod . . Wed, Jul 12, 8:59PM ET (-0500 GMT)
John B, as a follow -up to the _avid_trader/chat member 8:29 SPX question, at the end of last month the 20d BBs contracted to their tighest range since mid-December and prices are now tagging the upper band; question: could this not be a false move with a capitulation leg imminent, a la early January, starting say, tomorrow back to the lower band, particularly in light of a potential rising wedge formation from the recent lows of last week?

avllama . . Wed, Jul 12, 8:59PM ET (-0500 GMT)
John, thanks for the interaction!!

lmarsh . . Wed, Jul 12, 9:00PM ET (-0500 GMT)
Thanks Mr. Bollinger, Avid Trader.