Weekly Talk

[JTH]

For some reason, I find that when I'm going over the weekly time-frame, a Bollinger Band (13, 2) seems to work rather well.

The Transports have their first close above the 13MA since June 18th.
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The NASDAQ has its first close above the 13MA since April 30th.
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The S&P 500 has its first close above the 13MA since April 30th.
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The S&P 600 has its first close above the 13MA since May 14th.
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All in all, perhaps it's an encouraging sign?

 

[JTH]

EFA has its first close above the 12MA since April 23rd, while the dollar didn't put in a lower low this week on the 6th candlestick.

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[crws]

So far, so good. Now for the follow-through.

 

[KevinD]

Help me understand the 13, 2 part. Apparently you can adjust how the Bollinger Band acts with these parameters because they are adjustable.

A couple of questions.

The 13 is the centerline? And it's the 13 period MA?

So the 2 has to be the upper and lower lines some how, right?

How do you decide the parameters to use?

I'll have to go to Investopedia and read more about it.

 

[JTH]

Help me understand the 13, 2 part. Apparently you can adjust how the Bollinger Band acts with these parameters because they are adjustable.

A couple of questions.

The 13 is the centerline? And it's the 13 period MA?

So the 2 has to be the upper and lower lines some how, right?

How do you decide the parameters to use?

I'll have to go to Investopedia and read more about it.

You have it right, the 13 (center line) is in fact a 13 Simple Moving Average, with a deviation of 2. If I used a deviation of 3, the outer bands would spread further apart. I remember a while back, someone on this forum said they used this moving average on the weekly time-frame. I had looked at it and agreed it worked rather well, but at the time I wasn't watching weekly charts much. A 12 SMA works well on the Monthly charts, but neither a 12 or 13 work well on the daily time-frame because it whipsaws too much, especially in the TSP world.

 

[JTH]

The good news is the top 4 closed above the 13MA, the bad news is the inner/outer bollinger bands are tightening. I suspect this means we can expect a narrower trading range in the future, but the truth is this isn't my area of expertise, so it's just an assumption.

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As for the dollar, is the Bollinger band telling us we are near the bottom? This is the 7th week down, so the questions for me are have we hit the bottom, and if so how will this affect stocks? Either ways, it's time for my to start watching the I-Fund again.

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[KevinD]

The tightening of the bands is often used by technical traders as an early indication that the volatility is about to increase sharply.

http://www.investopedia.com/terms/b/bollingerbands.asp

 

[JTH]

http://www.investopedia.com/terms/b/bollingerbands.asp

Ouch (but thank you) I wish you hadn't told me that, the last thing I want to see is more volatility!

 

[JTH]

Another Bullish week on the charts.


The Transports & NASDAQ made a lower high, but still manged to close with a higher high.
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Great news for the S&P 500, it both made a higher high and closed with a higher high.
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No love for the small caps, it made both a lower low and closed with a lower low...
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The I-Fund did awesome last week. EFA made and close with a higher high and broke through the upper bollinger band, while the Dollar made a lower low and closed at the bottom the lower bollinger band.
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[JTH]

The weekly charts went bearish last week with all 4 breaking below the 13MA. S&P 500: Upper band 1134, lower band 1035, 13 moving average 1084.


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[JTH]

2nd week bearish for stocks, while we are bullish on bonds...

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[JTH]

Although this is the third bearish week for stocks, the small caps did manage to close in the green. AGG did close in the red this week, but a pullback was expected after a piercing of the upper bollinger band. For me, stocks seem to suggest we are due foe some sideways action.
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[JTH]

The 3 week bearish action was snapped this week, The S&P 500's upper bollinger band sits at 1135

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[JTH]

The weekly charts show we've pierced the top of the bollinger band. Combining this with a slight spike in volume on the Transports, I'd expect a healthy pullback this week. Will we get it?

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[KevinD]

I've heard that spikes above don't necessarily mean that there will be a pullback. Actually the opposite. Closes outside the upper BB signal continuation.

You have to register but I think the webinars are worth the effort.
http://www.tradingacademy.com/Membership-Benefits.aspx

Great to see you posting again.

 

[JTH]

I've heard that spikes above don't necessarily mean that there will be a pullback. Actually the opposite. Closes outside the upper BB signal continuation.

You have to register but I think the webinars are worth the effort.
http://www.tradingacademy.com/Membership-Benefits.aspx

Great to see you posting again. View attachment 10044

I'm glad to see someone around here disagrees with me. I don't really follow the BB on the daily timeframe, for me it works better on the 13MA weekly. I look at the upper band piercing as a good moment to take some profits and look for a lower re-enty bounce off daily support, same with the bottom being a good place to exit some shorts. I happen to think this markets should head lower, but it doesn't matter what I think, only what I can make money off of...