There are two ways to assess highs and lows. Nominal or "absolute" highs reflect the specific price of a high. A high at $100 is higher than $90 on an absolute basis. "Relative highs and lows" are assessed relative to a moving average or some other point of central tendency. Bollinger Bands are an excellent assessment tool. A new high that extends above the upper Bollinger Band is still higher than a high that did not reach the upper Bollinger Band...even if that new high is actually at a lower price than the preceding high. In other words, a high at $90 can be higher on a relative basis than a high of $100.

Strategy Session October 8th, 2013

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