Stochastics indicate when the market or any stock condition is either overbought or oversold. These conditions are the basis for for all trades. When the Stochastic is below 20% or at zero, its time to go long. When the Stochastic is above 80% its time to sell. Thats the general rule, but there are exceptions. During a rally, the 80% market for selling does not apply because the stock will continue even when the stock becomes overbought. From a standpoint of a MM or specialist, the psychology states that most trades will short when the Stochastic is at 80% or higher, therefore MM and specialists will go against the general grain of understanding by pushing the stock higher, therefore 'creaming the shorts'. Thats the absolute ground zero approach to trading, where the objective of the MM or specialist is to always have the trader sell off in a loss whether its an uptrend or a downtrend. Stochastics are perhaps one of the most useful indicators for entering and exiting a position, but there are exceptions. Again, in a downtrend, the stock can fall well below 20% or well below zero Stochastic and not bounce up significantly. It depends on the stock. Most high volume trading stocks like CHKP, CIEN, and the likes will bounce up to give you a point or two, or even half point. The point is that Stochastics work with relatively little understanding of voodoo or over analysis techniques. The point is to react to the market, not think about what to do, and the Stochastics offer a fairly well guideline. Thanks.