Fib. Zone Pivots on Nov. 16, 2009
November 16, 2009 4:15 PM

A Trend Trading day. When @ES is over 9 pts up at the open, it is pretty much given that markets may close up strongly. About 70% of the time when @ES and @YM trading up (6 pts for @ES or 50 pts for @YM) pre-market, they close strongly up. The probability factor rises even higher after the first hour if they continue to trade up. So, the question is how far high they move up or move down on trend days? This is where Fib. Zone Pivots are helpful.

Fib. Zone Pivots shows trading extremes of any trading instrument for each trading day. They are used as key guidelines for support/resistance in my trading. They can be applied to any instruments.

Fib. Zone Pivots are computed using yesterday’s range. 50, 62, 100, 138, 162 % of yesterday’s range is added for today’s Pivot (for Resistance) and subtracted from today’s pivot (for Support) to compute the Fib. Zone Pivots.

About 10am, @ES traded near Fib. Zone Bands (138-162) and traded in that zone most of the day. Around 3pm, the breakdown below the Fib. Zone Band (138 level at 1108) resulted a trade up tp FZ100 level (1103). ES stayed mostly upside and Meredith Whitney didn’t scare the serious traders.

FibZPivots_Nov1609

1. Fib. Zone Pivots

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