“The Squeeze” In Action

Posted by barkand on April 19, 2011 under Bollinger bands | Be the First to Comment

The chart above is a 5-minute chart of yesterday’s (April 18, 2011) action on the NASDAQ. The market took a punch in the face at the open. But, for me, the more interesting thing happened later in the day. By 1PM New York time, volatility had disappeared and the Bollinger band width had become very narrow. At this point, the market dipped down to the lower band and – as is often the case – turned around. It rallied the rest of the afternoon and finished 20 points higher from where the “squeeze” began.