More than any other tool, BBs pinpoint hidden swings and telegraph whether the profit door lies open or closed. Bands may swing through relative highs or lows and then pull back into proportional retracement to start another trend thrust. Or they can enter extended ranges that meander back and forth without direction. Movement frequently stops dead in its tracks when price rises into a falling band or drops into a rising one. Sideways bands can appear in both rangebound and trending markets.
Price often fails to reach new high or low territory until bands expand to clear the path.
In many ways, Bollinger Bands predict time better than they predict price. The top Bollinger Band rises toward a test of the intraday high as Worldcom drops. This sharp divergence signals the eventual breakout after price finally reverses off of the bottom band. Watch band slope closely when bars return to test important highs or lows. The skilled eye watches constricted bands in real-time to estimate the buying or selling force required to push them out of the way.