THE HAndbook oF TEcHnIcAl AnAlySISsignificant support level at extreme volume. Note also that the overextended vol-
ume spikes are all above the rolling 100‐day 2‐sigma level.
In Figure 6.15, we used a Bollinger Bandwidth oscillator to time volatility in
the Silver market. Notice the volatility spikes coinciding with volume overexten-
sions, signaling market tops and bottoms. Many practitioners also filter out vola-
tility below a certain threshold and regard it as noise.
fIgure 6.13 Volume Blow‐Offs on the Daily Chart of E‐TRACS UBS Bloomberg
CMCI Food ETN.
Courtesy of Stockcharts.com
fIgure 6.14 Volume Overextensions on the Daily Chart of SPDR Gold Trust Shares.
Courtesy of Stockcharts.com