Blew through Bollinger Band?

a529612 · Jun 8, 2006

Is a stock due for a bounce if it took a nose dive and blew through Bollinger Bands set at 2 Std Dev outside the 50 Day m.a.?

trader3 · Jun 8, 2006

Good chance, but it may just keep falling... and then what will you do? Also, how big a bounce are you looking for and when do you take your profit? Tricky business.

Surdo · Jun 8, 2006

I hope you are kidding me!

BB's are a "guide", study his book what pinching means.

What T.Frame are you referring to, I use 4 TF's, we are in uncharted territory so I throw out anything shorter than a daily for meaningful TA.

Cheers

Pabst · Jun 8, 2006

Stocks are not allowed to rip through arbitrary BB zones. I'd report that stock to the SEC. How's one supposed to catch a falling knife in a crash if BB's are violated?

Quote from a529612:

Is a stock due for a bounce if it took a nose dive and blew through Bollinger Bands set at 2 Std Dev outside the 50 Day m.a.?

murray t turtle · Jun 8, 2006

Quote from Pabst:

Stocks are not allowed to rip through arbitrary BB zones. How's one supposed to catch a falling knife in a crash if BB's are violated?

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How dare they do that???

And to add to the insult DIA, YM ,SPY, ES looked like they would tag / blow thru 50 dma. this month .
How dare
the bulls & bears retreat @ 50dma area?????

macal425 · Jun 8, 2006

Quote from a529612:

Is a stock due for a bounce if it took a nose dive and blew through Bollinger Bands set at 2 Std Dev outside the 50 Day m.a.?

Wait for at least 10 days then look at chart again. If it bounced, then it was due one. If it didn't, then it wasn't due one. Simple really.

martys · Jun 8, 2006

Quote from a529612:

Is a stock due for a bounce if it took a nose dive and blew through Bollinger Bands set at 2 Std Dev outside the 50 Day m.a.?

Usually statistics should be applied to stock returns and not the stock price like BB (wacky math) and the empirical data show the stock returns appeared not to be normally distributed. See http://www.gummy-stuff.org

kiwi_trader · Jun 8, 2006

Quote from Pabst:

Stocks are not allowed to rip through arbitrary BB zones. I'd report that stock to the SEC. How's one supposed to catch a falling knife in a crash if BB's are violated?

LOL. Very good.

And marty, don't you mean that the evidence is that prices are not normally distributed (maybe you do mean returns given how abnormally distributed mine appear to be at the moment).

martys · Jun 8, 2006

Quote from kiwi_trader:

LOL. Very good.

And marty, don't you mean that the evidence is that prices are not normally distributed (maybe you do mean returns given how abnormally distributed mine appear to be at the moment).

Hi kiwi

I think the statisticians would normally do their thing on population distribution of stock returns i.e. P(t) - P(t-1) where P(t) is price at interval time t.
But Bollinger just uses price P(t) and not change of price (P(t) - P(t-1)) ... bad math??

My brain turned to cheeze... can't do math without a calculator myself.

P.S. the population assumption (bell curve) is wrong anyway.

ChaosNSX · Jun 8, 2006

Wait till it breaks back through the band and holds.. classic Victor S. 2B pattern. Look for liquidity and keep things tight right around it. Also make sure the S&P is trading UP. Never hurts to have the wind at your back. I agree BBs are a guide not the rule.

Only a gambler tries to catch that last eighth. Goodluck