OHLC relationships, intra-day

         Use the OHLC relationship question to examine market behavior between periods .

Example:

         In an uptrending market, the market opens higher from one day to the next.

Questions from Traders:

         On days when the market opens higher during a bull market, does the market hold its overnight gains? Is there a trend intra-day that can be exploited?

Setting Up the Search:

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

Answers:

         [Following applies to 11/2/92-03/01/93]. Even though the bond market was in a clear uptrend from 11/02/92 to 03/01/93, holding a long position overnight earned a trader little immediate gratification the next morning. The percentages were almost exactly 50/50 that the market would open higher. Another way to look at this is that the market continually gave traders the opportunity to get into the market at prices at or below the previous day’s close. However, the results of two new searches helped us find a profitable way to exploit the uptrend. We checked for the number of days when the market closed higher than the current day’s opening and found that, in a bull market, this happened nearly 58% of the time. This percentage jumped to over 64% when we tested how many times the market closed higher today versus yesterday’s opening. This allows you to use the opening price as a key level for establishing profitable trades. If you can create a position with an average cost at or below today's or yesterday’s opening, you will significantly enhance your chances for a profitable day trade.