GAPS AND PIVOTS

In the for what its worth category, the daily Pivot Point discussed in a prior post, is generally touched or traded through appoximately 75% of the time in liquid markets such as Index ETF's.


How is that helpful to trading? A market that trades above its Pivot Point is generally bullish and those that trade below their Pivot Points are generally bearish. So one may have entry plays into pullbacks and pullups into the general trend as it approaches the Pivot. Also, if a market rips above its Pivot Point or plummets through, it may be setting up for a change of direction trade.

Todays Pivot Point on the SPY is about 130.5 and the pivot point has not been touched on the SPY since early tuesday morning. That could be an important level to watch if the markets fill the opening gap.