So having nothing better to do I did the whole calculate pivot point levels this weekend. If some of the text that I read holds true there should be significant resistance at about the 30623 level. I just thought to do this post to enable some debate and hopefully elicit some response. Today was quite, so no bets on the response comment though.
Went to the resistance level and then seemed to respond to this. Although it was within the R1 as stated. This was the reason for my earlier post, I am testing the whole pivot theory, if the theory holds, it is down from here. But let's see, oh yes, almost forgot to mention this was done on the weekly pivot points. Hope to hear from some forumites who might be able to tell me if this is simply the fruit of an over stimulated imagination or if there is something behind the price action (yip although not followed through with high volume).
hi hungry, there is no theory as to whether a pivot point / R's / S's etc should or should not hold as far as i know? it's only an indication of perceived support and resistance levels but there's no guarantee as to whether a S or R level will hold or not. if only it were that easy! it's my experience however that S & R levels do figure in the minds of ALSI traders as the market will often test these levels. as such they can be used as targets, but nothing is guaranteed.
Rams, thank you for the suggestion, I am in the process of testing this, with a small (R & D) budget. I thought to also see if I do some back testing to test the following theory I came up with. If in a downward trend a pivot resistance line R1 is responded to, what is the predictability (65% should be good enough ) of the price action not going through the R2 resistance level, but proceeding down to the support level S1. To add a bit more, the share must be under performing the ALSH. Of course the same test would be done on the long positions, given the opposite parameters. Who knows if this might or might not work.