Also noteworthy: This may seem boring. If so, ignore it! On the weekly chart (left), note that the Bollinger Bands are beginning to WIDEN again (see the purple lower band). That is indicative of ACCELERATING momentum on the higher time frame! And note on the daily chart (right) that the BBand on the bottom is moving up FASTER! With BBands, people tend to look only at the band nearest prices/candles, but in actuality, the more important thing is to pay attention to the behavior of the band OPPOSITE where prices are. It's shape is even more meaningful.
The BBand pattern on the right chart (daily) is one that is called "parallels" because the bands tend to move "parallel" to each other over an extended period. It is the most profitable kind because it denotes a long, steady, but gradual trend. When prices move too far outside the band in a single session, they are like an overstretched rubber band that has a tendency to snap back in a corrective move before proceeding even higher. When prices move too far, too fast, they tend to form a different pattern, ironically called a "bubble". It has no relation to what we normally refer to as economic "bubbles". Bubble BBand patterns tend to burn out quickly and are profitable, but not nearly as much as parallels. A series of bubbles on a lower time frame often appear as parallels on a higher time frame.
Since BBands are based upon statistics (the purple bands represent 2 standard deviations), the further outside the bands prices go, the more likely we are to see a contraction because the market is overbought/oversold, at least temporarily, until the market can "catch up", take a breather, and the crowd mentality can absorb the new, more extreme prices. Behavioral economics! I refer to this as the "rubber band" effect. It would be interesting to add a 3 standard deviation Boll Band to see if today's activity reached that level. I hope that's not too verbose!
If this isn't too boring, and you are interested in some very detailed tech analysis reading, I translated a book from French 4 years ago on a methodology called "Dynamic Technical Analysis" (as opposed to "static" Tech Analysis used by most traders) by Philippe Cahen, the former VP of Tech Analysis at Credit Lyonnais. I could perhaps put the doc on a file sharing website where you could download it. It is VERY detailed -- about 200 pages to teach a single trading methodology. It is also translated from French, so the language is, at times, somewhat convoluted. I've only shared it with a handful of other people, and most of those found it to be too complex to use. Even I have made alterations in my own trading.
