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Pastimes : ASK Vendit Off Topic Questions -- Ignore unavailable to you. Want to Upgrade?

To: sandintoes who wrote (11783)	4/25/2000 6:53:00 PM
From: Vendit™	Read Replies (2) \| Respond to of 19374

Sandi Im spending alot of time here locally doing much needed property improvements to my rentals and have not had my attention directed fully at the market but I did want to clarify one thing about the BB's. When the bands narrow down tight it is indeed due to decreased volatility but it should be noted that it is during these times that increased distribution or accumulation is taking place. View tight bollies like this; Envision a wet bar or soap. This is the price of the stock. Now envision your hands as the bollinger bands. Now take the soap (the stock price)in your hands and squeeze it.(i.e. ever tightening bollinger bands) What happens to a bar of wet soap when squeezed? It moves violently in "a" direction. The same happens to a stock when the bollies get tight. That is a signal that a violent directional move is about to take place. The trick is to determine which direction the move will be. With practice you can get good at recognizing the likely direction. I use 1 minute intra-day bollinger bands as my main tool when finding entry and exist points. This is once again the Cow's post to you of bollinger characteristics. It is worth studying and learning; Mr. Bollinger notes the following characteristics of Bollinger Bands. 1- Sharp price changes tend to occur after the bands tighten, as volatility lessens. Edit in: Up or Down 2- When prices move outside the bands, a continuation of the current trend is implied. 3- Bottoms and tops made outside the bands followed by bottoms and tops made inside the bands call for reversals in the trend. 4- A move that originates at one band tends to go all the way to the other band. This observation is useful when projecting price targets.