|
|
Pivots
Our support/resistance zones are called pivot points. They
are based on the previous day, week, or month's high, low, and close. On large
gap opening days, our software allows you to include the Globex close for
futures or the current day's opening price for stocks. This will give you more
accurate support/resistance zones and are the ones that most large financial
institutions use on those days.
The most common idea behind using
pivots is to go long above the pivot and short below the pivot. The markets
often fluctuate and are very often choppy around the pivot. Many false
breakouts and breakdowns happen around this level. It is often wise to wait for
a trading range to develop around this main number, and to buy a breakout from
the high of this trading range, and sell a breakdown below the low of the
range. A stock or futures real trend strength becomes evident once it can rally
above M+ or sell off below M-. Stocks that are above M+ will often continue
their rally to R1 or further. Stocks that are below M- often continue to S1 or
below.
A pivot is a proprietary
indicator that shows turning points in a futures/commodities price performance.
Pivot points are useful as starting or ending points when drawing GANN boxes,
Fibonacci Time and Regression Trend Channels.
Pivot Points:
P = Pivot
R1 = Resistance level 1
S1 = Support level 1
R2 = Resistance level 2
S2 = Support level 2
R3 = Resistance Level 3
S3 = Support Level 3
| R2
Resistance Level 2 - This level often provides strong resistance. Stocks
that are above and stay above R2 levels are often in strong trends and many
times continue higher (that day). |
| M ++ Halfway
point between R1 and R2 and moderate resistance. |
| R1
Resistance Level 1 - Stocks often reverse at R1, but if they can get through
this level they will usually rally to the R2 level. |
| M + Halfway
point between the Pivot and R1. This area is often the first test of the
futures or stocks trend strength. When a future or stock can't break
through M+, it will often reverse all the way back to the pivot level. If
this area is broken through, stocks will often continue to the R1 level. I
find this is one of the most useful resistance levels. Stocks above M+ are
in moderate trends and your trading strategy should to be to buy all dips at
support levels. |
| Pivot
- Average of previous period. Strongest support or resistance. If stock or
futures is above this line, wait to buy pullbacks. If stock or futures is
below this line, wait for a rally to get short. Futures and stocks often
oscillate above and below this number for quite some time before a breakout
in one direction. It is usually best to wait for a few shakeouts and then
buy a breakout from the high of the trading range, or sell a breakdown from
the low of the range. Your first target for buys is the M+ level above, for
shorts the target is the M- below |
| M - Halfway
point between the Pivot and S1. This area is often the first test of the
futures or stocks weakness. When a future or stock can't break through M-,
it will often rally all the way back to the pivot level. If this area is
broken down through, they will usually continue to S1 |
| S1
Support Level 1 - Stocks often reverse at S1, but if they can break down
through this level they will usually selloff to the S2 level. |
| M -- Halfway
point between S1 and S2 and moderate support. |
| S2
Support Level 2 - This level often provides strong |
|
