Over the last 9 days, SPY has bounced from beneath the lower Bollinger Band to rest just beneath the upper Bollinger Band. A close above the upper Bollinger Band will signal an abnormal market.
I will be watching for a close above the upper Bollinger over the next couple of days. Should it happen, it will effectively turn off any short signals I may be considering.
Here is a previous post I wrote on the topic of closes above the upper Bollinger Band, and why they can signal an abnormal market.
Abnormally Overbought Is Not Bearish
Note the leap from beneath the lower to just beneath the upper Bollinger Bands. As a bonus, the ROC indicator is in the bottom pane. It is still signaling short. However, it appears that a healthy pullback may flip it back to long again.
ES 1230
Who knows. Wouldn’t be surprised to run all the way to the 200 day average, or at least 1260.
If the close is above the bollinger bands, should the volume also register over the 50 day MA to confirm a strong move upward? This latest rise upward appears to have most volume below the moving average on up days.
I would have to test the volume variable. Higher volume would be better, but I’m not sure how much we should handicap the move due to lower volume.