It's a complete deadlock, at the moment.

The chart featuring the Bollinger Bands on SPX, INDU and NDX, became our chart in focus a couple of weeks ago, and it continues to hold that role. As you can see, even though prices moved above the 20dMA a couple of days ago, resistance was met at a flat upper band, and the indices continue to be mired within the range and until the bollinger bands start to move out of the way, there isn't going to be much chance of a new trending move.

The following is another update to the current 'Chart In Focus,' which of course was initiated this Tuesday.

S&P-500, Dow Industrials, Nasdaq-100 Indices with Bollinger Bands

This has to be one of the most unique periods we've come across. For prices to move from the upper band to the lower band and back to the upper band in the space of 5 days, as NDX (bottom most pane on chart) has, is something we cannot recall having seen on a major index previously; at least not in recent memory.

Now it's not that there have been massive moves on the indices; far from it. It is just that volatility levels on the minor trend have tightened so much as to have caused the bands to virtually be sitting atop each other. Okay, perhaps that is an exaggeration, but you get the gist.

In any case, pondering the uniqueness of these developments isn't of much worth. What is worth keeping an eye on, however, is the development of the bands over the coming sessions. Just because prices, have moved above the 20dMAs today, doesn't mean that the bulls are back in business.

The bottom line is that the bollinger bands need to start to expand, before a new trend can begin. So until that happens, this chart will continue to be our current "Chart In Focus." Oh yeah, when we first debuted this chart, our "focus" was primarily on the lower band, but given developments both bands are now of interest.

This is an update to the current Chart In Focus, "Focus on Lower Bollinger Bands," which debuted yesterday.

Click to read more ...

New Chart in Focus: The accompanying chart debuts as our new 'Chart In Focus' today.

So it looks like the markets have broken their 20dMAs (to the downside) today and that should mean that a bearish phase may be taking shape on the minor trend, shouldn't it?

Well, we've been pointing to the possibility of a market top for the past couple of weeks - several potential sell signals have been highlighted on the daily and weekly charts - and today's break seemingly confirms those sell signals. While the onus is now certainly on the bulls to prove that they're still in the game, the Bollinger Bands, which have undergone extreme contraction over the past couple of weeks, are providing the bulls with a small chance to yank things back in their favour.

Click to read more ...