Stocks closing at mid-range

Discussion in 'Trading' started by Technician, Feb 1, 2010.

  1. is it just coincidence, or is there some significance when stocks close in the middle of the day's range such that the high becomes tomorrow's R1 and the low becomes S1?
  2. happened on SPY today. today's R1 was yesterday's high.. and S1 was yesterday's low..
  3. 1) It's a "certainty", not a coincidence. According to the calculation, if the market closes at mid-range, i.e. (H+L)/2=C, then R1 equals H and S1 equals L.
    2) The only potential "significance" is that you may want to expect prior trends to be extended to give an idea of which number will be tested first, either H or L. :cool:
  4. you misunderstand. I mean is there any significance to the closing exactly in the middle part. I know the S1/R2 is a consequence of the calculation :)
  5. 1) Mostly not. It's a "probability", 1 divide by the number of ticks in the daily range, not a "significance", unless it's an option expiration day and the closing price is an option strike price!
    2) I'm not aware of any conspiracies perpetuated by large traders to "psyche out" the Pivot Point Guys by settling the market at mid-range. :(

  6. Makes a Doji, doesn't it?

    Condsider though that the SPY (with one AMEX specialist) is a proxy for an index that has 500 underlying specialists. picture.
  7. 1) Is it vanilla or cinnamon scented?
    2) You're assuming that the open and close are the same. :eek:
  8. You have a point. I mistakenly made the assumption the open was ALSO in mid-range. Open was never mentioned. I stand corrected.

    For the record, I don't give credence to candlesticks other than the dreaded "dogi".

    I also don't give credence to pivot points, particularly multiple ones (though they probably have more predictive properties than Fibonacci re-tracements).

    I do however give credence to the distance from open to high, referring that measure as "upward volatility" Over time, price follows net volatility.

    Now................back to the significance of a CLOSE of an ETF at it's mid-point.

    A strong close implies (probability) a strong open. A close in the midrange isn't a strong close.
  9. Overnight trading can "negate" that. :cool: