SPY: Why did this boundary drop without a matching price drop?State Street SPDR S&P 500 ETFBATS:SPYInvestradeLook at the amber upper boundary during the middle of October. It holds flat above the candles, then steps lower. That move is a change in the highest high remaining in the lookback, rather than a candle falling by the same amount. Twenty bars of what This hourly chart uses Donchian Channels with length 20 and offset 0. The upper boundary is the highest high in the latest 20 chart bars. The lower boundary is the lowest low. The midpoint is hidden here to keep the two extremes visible. Twenty hourly bars are not twenty trading days. The calculation follows the bars present under the chart’s session settings. Why the upper line steps down As each new bar enters, the oldest bar leaves. The upper line stays flat while the same highest high remains in the window, unless a newer bar exceeds it. Once that extreme expires, a lower high can become the highest of the remaining 20 bars. That is why the upper line can drop while the candles are already trading well below it. Follow the flat section into the middle of October and the subsequent downward steps: the rolling reference is catching up with the history it now contains. Read the lower boundary separately A fresh lookback low can push the lower line down. An old low expiring can move it up, even without an equivalent upward jump in price. Channel width therefore responds to both new extremes entering and old extremes leaving. With offset 0, the current bar is included. A new lookback high or low can move the relevant boundary on that bar. A touch alone is not an instruction to buy or sell. Try it Choose a completed bar where the upper line steps down. Count back through its 20-bar window and compare it with the preceding window. Which high left? Which high replaced it? Checking that change makes the step easier to interpret. Follow @Investrade for more Chart Basics. For educational purposes only. Securities shown are illustrations, not recommendations to buy or sell. Past performance does not guarantee future results. Investing involves risk, including loss of principal.