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At the risk of herecy and the fact that the market will do what the hell it
pleases, traders still impose a mathmatical matrix on prices that confine
it for variable lengths of time.
Pivot Zones are price ranges where an index will find support and resistance.
The general rules are to buy at support and sell at resistance. This is
easy to say and difficult to implement without the use of some additional
trend and oscillator information. A breakout of a zone may find price
seeking the sanctum of the next zone. The yellow dotted line in the center
is a key line which price is likely to move towards initially in indecisive
mkts before heading for S1 or R1. Very weak markets like on Thursday will
see price drop through S1 and S2 all the way to S3 and S4. Strong markets
move the opposite direction through R1 and R2 up to R3 and R4. It is
possible to use these price levels when planning the next day's strategy
for entry and exit and for trading during the day.
BobR
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