Pivot Ranges: Useful Tool or Snake Oil?

Discussion in 'Technical Analysis' started by bluedemon77, Aug 10, 2006.

  1. riskette

    riskette

    bluedemon77,
    I second everything steve46 wrote. Haven't read Mark Fisher but, I found John Person's writings and webinars of value in learning how to use pivots. My 2 cents:

    1) Figure out the best High, Low and Close to use to calculate S3 to R3 for the particular market. Obviously, the best pivot values are the ones that more market participants use. I just find these by trial and error. For example, for 30 year TBonds, I find it best to use the High and the Low of the 24 hr electronic session, and the PIT settlement close. For the ES, I think the day session High and Low and Pit settlement work better than the 24 hr High and Low. For QM (emiNY crude), I use the day session CL numbers.

    2) Person talks about using moving averages of the daily pivot (3 day vs 1 day) to give one a bullish, bearish or neutral take on the market for the next day. If bullish, targets for the high and low of the next day are R2 to S1. If bearish, R1 to S2. Watch how close these come to the actual numbers, especially in the 30 yr TBonds.

    3) Pivots also can be predictive of swings of movement during market moving news events like FOMC announcement, Employment Situation numbers, etc.

    attached is Person's powerpoint presentation for one of his CBOT webinars in which he talks about pivots, among other things.
     
    #11     Aug 10, 2006
  2. riskette

    riskette

    Today's trading on the 30 yr TBonds was a perfect example of the High Low targets bounded by the pivots. Bearish on the Bonds going into today based on 1 day MA of daily pivot under the 3 day MA of daily pivot. Predicted target for high would be R1 10900, target for low S2 10808. Actual high 10831, low 10808.
     
    #12     Aug 11, 2006
  3. toc

    toc

    "You don't predict.
    You react."


    Good point, price is the master of the market traders, follow the master and be happy!

    ps: i need more happiness.
     
    #13     Aug 11, 2006
  4. I don't know.

    I've tried for years to follow the pivots, with mixed results.

    Here's what I mean.

    1) the line is first resistance
    2) the line is the median pivot
    3) the line is first support

    Last Tuesday

    since i can only post every minute or so, i'll make a comment.

    comment: price action fell below 1st support and traded there all day, trading back up to it at the end of the session
     
    #14     Aug 11, 2006
  5. Last Wednesday

    comment: price action traded above 1st resistance and pretty much held up there all day (probably trading back and forth between the 1st and 2nd levels of resistance)
     
    #15     Aug 11, 2006
  6. Last Thursday

    comment: OK, price opend at 1st support, moved through the median pivot up to 1st resistance, and was held back there.
     
    #16     Aug 11, 2006
  7. Last Friday

    comment: price action opened at 1st resistance, dropped to 1st support and, well, found support there.
     
    #17     Aug 11, 2006
  8. Monday

    comment: Price action opened between 1st support and the median pivot and traded in that range for the entire session
     
    #18     Aug 11, 2006
  9. Tuesday

    comment: Price action opened at the median pivot, found support and traded up to 1st resistance, dropped back down to 1st support, ping poned off of the median pivot again, and dropped to hold below 1st support, whew!
     
    #19     Aug 11, 2006
  10. Wednesday

    comment: price action opens at 1st resistance, drops to the median pivot, goes back up to 1st resistance, and drops to 1st support
     
    #20     Aug 11, 2006