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Is The Trend Your Friend?

All week long on Fast Money we are talking to the most respected chart readers on The Street to get their outlook as The Dow sits just 120 points from a record high.

John Bollinger, the legendary inventor of 'Bollinger Bands' joins the panel for this conversation.

What’s a Bollinger band and what is it measuring?

They define whether prices are high or low on a relative basis. … prices are high by definition at the upper band and they’re low by definition at the lower band explains Bollinger.

How often does it work?

They work for me the vast majority of the time says Bollinger. What people don’t understand is that they don’t give signals all the time. You have to wait and find set-ups…the mistake people make they try to trade one thing continuously using Bollinger Bands and that can be frustrating.

What’s your analysis of the S&P 500?

Based on my analysis I think the S&P 500 will go higher says Bollinger. We’re just in the process of working our way into new high territory


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Trader disclosure: On Sept. 25, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Macke Owns (DIS), (EMC), (ATVI); Najarian Owns (CBAK), (UA), Najarian Owns (DGX); Najarian Owns (GS) Options; Finerman Owns (GS); Finerman's Firm And Finerman Own (TEL); Finerman's Firm Owns (NMX), (NYX), (KFT), (BEAS); Finerman's Firm Is Long (GCO) Calls; Finerman's Firm Owns (MSFT) Options; Finerman's Firm Owns S&P 500 Puts; Finerman's Firm Owns Russell 2000 Puts; NBC Universal Is The Parent Company Of CNBC