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>Have you thought that , if a system / indicator / strategy
>( whatever the name ) were capable of predicting when the Close
>is going to be higher / lower than the Open , say 60 % of the
>times could make you a ton of money?
Such tendencies are easy to find with statistical analysis of the
price history. Norman Fosback, in his book Market Logic, showed
that stocks tend to have up days following up days, and down days
following down days, with 73% accuracy on the up calls and 62%
on the down calls in his sample. You don't even have to wait for
tomorrow's open to know the tendency. The average gain was .22%
and the average loss was .24%, compared to an average of all days
of +.03%
As a stand-alone trading edge, it's minor, and difficult to use
profitably for daytrading, for reasons that Walt Downs explained.
However, it's a convincing proof that markets trend.
Wayne Moody
wlm95@xxxxxxxxxx
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