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Gold/Mining/Energy : Gold Price Monitor

GDXJ 98.59

-2.8%

Nov 13 4:00 PM EST

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To: Terry Rose who wrote (11411)	5/7/1998 11:12:00 PM
From: Richard Mazzarella	Read Replies (2) of 116759

Terry, bollinger bands come from control theory where any process is considered "in control" if it remains between two standard deviations above an below its mean. The theory is probability based. SPC (quality control) also uses this theory. When a stock remains between the bands it's in a trading range, a move outside the bands is considered a breakout. Stocks that are at the top band are candidates for selling, and ones at the bottom band are candidates for buying. Most bollingers are designed to have the probability of the bands set at 95% (by definition, 2 standard deviations), but also use moving averages to smooth the bands. Bollinger was the first to apply this technology to stocks and it probably is one the most powerful technical tools in our tool box. Probably sorry you asked?

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