By Jeff Pierce

On Friday the volume on the Nasdaq exceeded the upper bollinger band that I’ve plotted on the volume section of the chart. I also noticed a large number of stocks on my volume scans that seem indicative of an index re-balancing, but keep in mind I don’t watch the news, so I’m not sure if that is really the reason. I’ve just noticed this in the past.

Anyhow, this is not an indicator to use on it’s own, but it’s something to take not of. Lots of volume with little or no movement in the actual index is worrisome. My timing signals remain on a buy signal except for the TSX which is in neutral mode at the moment. Take a look at the 2nd chart below for a weekly look at the Nasdaq to really add some clarity to this new way of using the bollinger band in conjunction with volume.






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4 Responses to “Using BB On Volume To Determine Tops/Bottoms”

  1. vimal Says:

    Interesting chart. Would you say volume closing above upper bb is la top or bottom? Lower chart would say when this happened before we rallied. Or do you see it as a possible turning point with direction to be confirmed.

  2. jeff pierce Says:

    I would say it can be a top/bottom. Something to take not of and use in conjunction with other indicators.

  3. Derrick Says:

    Do you think its due to quadruple witching?

  4. jeff pierce Says:

    probably…I don’t trade options so options expiration isn’t on my radar.

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