Closing prices

         Use the closing price question to determine how the closing price relates to key market levels from yesterday, today and tomorrow.

Example:

         Today’s closing price is outside of the range delineated by second resistance and second support levels.

Questions from Traders:

         Is there a way to assess the amount of risk that I have in an overnight position? Is there any way to determine what the likely range is for tomorrow’s trading? How often is the closing price outside of the secondary support and resistance levels?

Setting Up the Search:

Click on the parts of the box below where appears for explanations of features.

Answers:

         We searched for those days in which the market closed below second resistance and above secondary support. We found that the secondary support and resistance levels served as the outer boundaries of the next day’s trading 67.8% of the time. As a result, we can make an objective determination about the risk of a position. We can do further testing to examine the percentages if the market trades beyond the initial boundaries that we tested for.