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<DIV><FONT size=2>Larry Williams' book "Long-Term Secrets to Short-Term Trading"
discusses the importance of the Open to Low or Open to High of the day starting
on page 33. Basic thesis is that short range days beget large range days,
ala Crable et.al..</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=2>"Here is the second absolute truism about large-range days,
those big blast-off days we short-termers simply must have to come out ahead;
large-range up close days usually open close to the low and close on the
high. Large-range down close days open around the high of the day and
close near the low.</FONT></DIV>
<DIV><FONT size=2> This means you must take two things
into consideration in your trading. The first is that if we are "aboard" a
day that we think will be a large-range up day do not look for a buying point
very far below the open. as I said, large-range up days seldom trade very
much below the opening price of the day. This means you must not look for
much of a buying opportunity below the opening price.</FONT></DIV>
<DIV><FONT size=2> By the same token, if you think you
have a tiger by the tail --the possibility of a large-range day and price dips
very much below the opening the probabilityof a large-range up close is greatley
reduced."</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=2>The chapter includes a probability chart for use with with
bonds, none for the snp though. Perhaps Clyde or Don could work one
up. Continuing with a few more quotes referring to the bond probability
chart:</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=2>"At the point marked, we see that 15 percent time, we get
these hugh blast-off days if there is a dip less than 10 percent. By the
same token, there is an almost zero chance of getting a large blast-off close
above the opening if price has dipped 70 percent to 80 percent below the
opening.</FONT></DIV>
<DIV><FONT size=2> This true of all three lines; again
telling us the greater the price swings below the open, the less of a chance we
have of a positive open to close. This proves my rules:</FONT></DIV>
<DIV><FONT size=2>1. Don't try to buy bg dips below the open on expected
up close days.</FONT></DIV>
<DIV><FONT size=2>2. If long and price fall much below the open on expected big
up close days, "get out."</FONT></DIV>
<DIV><FONT size=2>3. Don't try to sell big rallies above the opening on expected
large down days.</FONT></DIV>
<DIV><FONT size=2>4. If short and prices rally much above opening on expected
large down days, "get out."</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=2>The usefulness of an indicator based on this is going to be
dependant on whether your datafeed broadcasts a real open or just yesterday's
close. With that in mind here is some simple code to track this in
realtime and a .giffer for today's snp.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=2>Inputs: up(20),dwn(-20);</FONT></DIV>
<DIV><FONT size=2>Vars: Prcnt(0),Rang(0);</FONT></DIV>
<DIV><FONT size=2>Rang=HighD(1)-LowD(1);</FONT></DIV>
<DIV><FONT size=2>If Rang<>0 then</FONT></DIV>
<DIV><FONT size=2>Prcnt=100*(Close - OpenD(0))/Rang;</FONT></DIV>
<DIV><FONT size=2>Plot1(Prcnt,"Prcnt");</FONT></DIV>
<DIV><FONT size=2>Plot2(0,"0");</FONT></DIV>
<DIV><FONT size=2>Plot3(up,"up");</FONT></DIV>
<DIV><FONT size=2>Plot4(dwn,"dwn");</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=2>BobR</FONT></DIV></BODY></HTML>
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