Don't Ignore This Chart!

Band Width Contracts as Dow Transports Stall


The Dow Transports have been flat for four weeks as the Average forms small weekly candlesticks in the 5000-5100 area. A visual assessment indicates that these are the smallest candlesticks of the year. Bollinger Band Width (10,2) contracts as the Average stalls. This volatility contraction could give way to a volatility expansion in 2011. Watch the direction of the price break for the first clue.

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Arthur Hill
About the author: , CMT, is the Chief Technical Strategist at Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London. Learn More
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