[RT] Fw: [cycletrader] Re: SPX update, RealTraders Email List Archive

In my methodology the extremes (highs and lows) represent the limits of participants perception of value for that time period. Sequences of time periods in the same direction tell us the persistence of the general sentiment (trend) and when reversals occur, the pivot points are important in that they represent the limits of value over the longer period of time. Pivot highs and lows should always be used for trend line construction however trend lines are not linear just as markets are not linear.

The close also has an important significance, especially in relationship to the previous three bars. I believe the close can give us important information about the next periods activity.

For example I have been researching an algorithm of the close to forecast the next periods direction some remarkable results. For example a two year test on the daily SPY resulted in 83% profitable trades when entering the next day at the signals high or low. When entering at the close of the signal day, a more remarkable result is that 99% of the trades presented a profit opportunity, regardless of the open price. Today's results on a variety of stocks entered short at the close was 23 22 giving profits at the open. The number of signals may also provide information on the size of the move but as yet unconfirmed.

So I conclude the close is certainly an important consideration but only in reference to the near term limits of value.

Jim White
Pivot Research & Trading Co.
PivotTrader.com

----- Original Message -----

From: watjohn84@xxxxxxcom

To: cycletrader@yahoogroups.com

Sent: Monday, December 07, 2009 7:44 PM

Subject: RE: [cycletrader] Re: SPX update

Utaro, Jim and Others,

These recent comments raise the question of the use of closing prices as opposed to highs and lows. As far as I can determine Gann used to take his ranges from the extremes, which also served as levels for his swing charts. However the closing price of the day or week does have a special significance in that it represents the final equilibrium of the bull forces and the bear forces for the trading period in question. Does anybody have anything to offer concerning when to use extreme prices and when to use closing prices?

John

From: cycletrader@yahoogroups.com [mailto:cycletrader@yahoogroups.com] On Behalf Of astrotrader33
Sent: Sunday, 6 December 2009 2:55 AM
To: cycletrader@yahoogroups.com
Subject: [cycletrader] Re: SPX update

Hi John,

I heard of that lady's name. The advantage of the closing price is that you can take some noise out. Same with the use of the closing price for form reading.
Though, the market is always right, and I just thought to throw in my two cents on the current hindsight scenario. The markets been slow and whoever gets the opening range pretty much dictated the outcome of the day until few days ago. So as long as it's not sideways I welcome either way.

Be water my friend.

Utaro

--- In cycletrader@yahoogroups.com, <watjohn84@xx.> wrote:
>
> Utaro,
>
> I'm certain your observation is valid. There is a woman who used to give
> trading seminars and who has written a few books - Connie Brown by name. In
> her major book she gives many examples of drawing trend lines from positions
> other than the extremes, providing sound arguments for her case.
>
> John
>
>
>
> From: cycletrader@yahoogroups.com [mailto:cycletrader@yahoogroups.com] On
> Behalf Of astrotrader33
> Sent: Thursday, 3 December 2009 4:23 PM
> To: cycletrader@yahoogroups.com
> Subject: [cycletrader] Re: SPX update
>
>
>
>
>
> Hi Joe,
>
> These are extreme closing prices so the dates are also a bit different. I
> should have put a remark in the first place. Have you noticed Brad draws his
> Gann angle from the closing price also? Closing price seems to have better
> predictability in this type of analysis from experience.
>
> All the best, Utaro
>
> --- In cycletrader@yahoogroups.com <mailto:cycletrader%40yahoogroups.com> ,
> jmh150 <jmh150@> wrote:
> >
> > Utaro
> > The low as shown by my provider on 3/06/09 =666.79 close= 683.68. The
> high as shown was 1576.09. Don't know how that affects your numbers. Might
> want to re-do ?
> > Regards
> > Joe
> >
> >
> >
> > ________________________________
> > From: astrotrader33 <utaro@>
> > To: cycletrader@yahoogroups.com <mailto:cycletrader%40yahoogroups.com>
> > Sent: Wed, December 2, 2009 10:45:07 PM
> > Subject: [cycletrader] Re: SPX update
> >
> > Hi Jim,
> >
> > Your chart reminded me the current market is behind time.
> > In SPX, 2.5 points per trading day has been working well. So I would like
> to touch on this subject. For example, using the closing price of Oct 09 '07
> top at 1565 to the Mar 09 '09 bottom of 676 was 355 trading days. 2.5
> pts/day x 355 -> 887.5. Subtracting this from the 1565 high projects 677.5.
> Only off by 1.5 points. Checking the previous swing low of Oct 09 '02 at 776
> (again using the extreme closing price) to the '07 high. There were 1258
> trading days, so 1258 x 2.5 = 3145. This is too big. So divide by 4 ->
> 786.25. Adding this to the '02 low of 776 + 786.25 -> 1562.25. Only off by
> 2.75 points. Going back further, 2.5 pts/day seems ok.
> >
> > Suppose the Gann angle tends to converge with price toward the end of the
> major swing, we are at the 188th trading day tomorrow Dec 03. So add 188 TD
> x 2.5 pts/day to the March bottom of 676 suggests 1146 is where time and
> price balance at this moment. However, the past study suggests the end of
> each swing tend to occur near the multiple of 8 trading days. This means the
> nearest multiples of 8 from 188 is 192, 200 and 208. 192 is Dec 09, 200 is
> Dec 21 and 208 is Jan 04 (could be off by a day or two due to the exchange
> holiday). There are many other ways to figure out the trend change, most
> importantly the cause. The current transit schedule shows a big train will
> arrive in the fourth week of this month. Not just one. Not like the little
> one back in late November. So overall the week of Dec 21 looks most
> promising for a major trend change. If this is the case, going back to the
> Gann angle, it will be in the 200 TD. So adding 200 TD x 2.5 pts/day -> 500
> > points to the March low close of 676 makes 1176 the target settlement
> price. BTW, that's a good round number :-)
> > Yours, Utaro
> >
> > --- In cycletrader@yahoogroups.com <mailto:cycletrader%40yahoogroups.com>
> , "Jim Nicolosi" <jfn_trader@> wrote:
> > >
> > > FWIW....here is my updated SPX chart using sq of 12 analysis ...this is
> the same method I used to call the 2007 top 30 days in advance of the Oct 07
> high....let' s see what happens....
> > >
> > > the ratio (price sq /TDs) in 2007 was 3.33....this projected ratio is
> 2.618.....2. 618/3.33 = 0.786....kind regards....Jim
> > >
> >
> >
> >
> >
> > ------------------------------------
> >
> > Yahoo! Groups Links
> >
>