Ian Woodward's Investing Blog

Stock Market: Bollinger’s “Bandwidth” Rules the Roost Right Now

My good friend Paul Reiche made an astute observation when comparing %B versus %B x BW and wondered why the colors are not in “Sync” as shown in chart 7 below.  The value of the Woody Indicator (%B x BW) is to give a faster look at the market movement as he rightly says and at such times it pays to turn your attention to what the Bandwidth is doing!  I will cover this scenario in charts 7 to 10 below.

2015-05-03 Blog Fodder

Let’s first look at the Market Indexes to show the lay of the land and as you would expect it has been a choppy market to say the least for the past month:

2015-05-03 Blog Fodder2

The Canaries haven’t faired much better though NFLX and PCLN have been the stars with LNKD just taking a wallop:

2015-05-03 Blog Fodder3

Note that the Internals of the Market as viewed by the Accum. vs. Dist. Ratio also show that we are at Stalemate:

2015-05-03 Blog Fodder4

The choppiness we have had to put up with is quickly evident in this next favorite chart of ours:

2015-05-03 Blog Fodder5

…And here is the Drummers Chart which also shows the signs of a Choppy Market:

2015-05-03 Blog Fodder6

Now for Paul Reiche’s astute observation below:

2015-05-03 Blog Fodder7

So let’s go back in time and then bring us forward to date to see what happened in a similar situation:

2015-05-03 Blog Fodder8

…And here is the follow on chart which shows how everything got back in sync!

2015-05-03 Blog Fodder9

Lastly, we are back up to date and so we keep a beady eye on the behavior of the Bandwidth to ultimately bring us back into sync:

2015-05-03 Blog Fodder10

Let’s see what transpires over the next week or so.  Hopefully things will right themselves in the fullness of time!

Best Regards,

Ian.

3 Responses to “Stock Market: Bollinger’s “Bandwidth” Rules the Roost Right Now”

  1. Theresa Hui Says:

    Hi Ian,

    Thank you for always looking out for our trading/investing well being. This is really awesome stuff to keep us focused in this choppy treacherous market.

    We sure hope you are fully recovered from the March workshop incident and that you are now in even better shape than before!

    Take care & have a great summer.

    Best regards,
    Theresa

  2. Paul R Says:

    Ian good stuff, many thanks!

  3. Peter Nath Says:

    God Bless you Ian and all who contribute to helping us to be our own Guru. Best Regards, Pete

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