From http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:bollinger_band_width : There is a tendency for bands to alternate between expansion and contraction. When the bands are unusually far apart, that is often a sign that the current trend may be ending. When the distance between the two bands has narrowed too far, that is often a sign that a market may be about to initiate a new trend.