1. Getting the Most from Bollinger Bands
By Bob Krishfield
May 31, 2011

2. What’s a Bollinger Band?
Bands plotted above & below Moving Average
Indicate Volatility of Price
Usually 20 DMA and 2 x Std Deviation
Encompasses 95% of the distribution
Less than 5% of points outside bands
95%
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3. Why Bollinger Bands?
Price Crossing into Upper Band indicates Strength, Crossing into Lower Band - Weakness
Position In Band Indicates a Relative High or Low
Narrowing of Bands Usually indicates a Change in Direction
Price Walking Upper Band Top - Strong Trend in place
%B Indicates overbought / oversold
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4. An Aggregate Look Using %B
%B Values Calculated for all Stocks in the SP500.
Range of Values Divided into 12 Columns:
<
> 1
Each Stock’s %B Value Added to the Count for that Column
This is Repeated for Each Day
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5. Counting %B Levels - Mkt Breadth
Count of Stocks in SP500 with %B at Various Levels
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6. Counting %B Levels - Mkt Breadth
Percent of Stocks in SP500 with %B at Various Levels
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7. Extreme OverBought - Over 80% Stocks %B > 1.0
Japan
Disaster
Extreme OverBought - Over 80% Stocks %B > 1.0
Extreme Oversold - Over 80% Stocks %B < 0.0
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8. Mar 2009
Bottom
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9. Flash
Crash
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10. Conclusions Bollinger Bands on a Single Stock or Index are informative
%B Counts of All Stocks in the Index Offers a High Definition view of How that Index is Positioned and Changing
Extreme Positions Can be Identified
Cause / Effect Relationships Using these are TBD.
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