<?> <?> <?> tops/bottoms

         Use the 3 period tops/bottoms question to find out what happens when an intra-day double or triple top or bottom occurs within the day's profile.

Example:

         A <D> <E> top. (Market makes a double top in <D> and <E> periods.)

Questions from Traders:

         What happens when the market makes a double top during Fed time (<D> and <E> periods)? Does the top hold? How often does the market trade through the double top?

Setting Up the Search:

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

Answers:

         To take a closer look at market behavior, we move from the general to the specific. We first take a look at all the days when a market double top occurred during Fed time, and then we can look for patterns in the market by refining the original search.

         The search shown above gave us all the days when the market made a <D> <E> top. This included days such as 1/31/94 when the <D> <E> top was broken later in the day, as well as days like 5/17/93 when the <D> <E> top held intact.

         While this search provides some information such as how often <D> <E> tops occurred in the time period we studied, our traders wanted to know more. What happens on these double top days? Does the double top define an intra-day high most of the time?

         To find out more we use the Refine button in the Search Results window . Refine is a powerful tool that lets you continue to break down and reduce search results. We started with all the days in our database and chose only those days with <D> <E> tops. We now want to refine the search to find out what percentage of the <D> <E> tops hold.

         We click the Refine button, enter the same parameters for a <D> <E> top, but this time we tag the Violated Later option. This will let us know how often the market makes new highs after a <D> <E> top.

         The results show us that 87% of the time the <D> <E> top is violated later in the day. (Note: In replicating this example, your results may differ due to the inclusion of additional days in the database after this text was written.)

         Searches can be further enhanced by using other questions in combination with the original search. Use other questions to determine the answers to questions such as: How far does the market extend when the <D> <E> top is violated? How often do <D> <E> tops occur when the Fed is easing?

Profile Analyzer Hint: All tops/bottoms that are reported in TPA are evaluated at the end of the period in question. For example, if you search for <C> <E> <F>, you are effectively asking, at the end of period <F>, whether the C, E, and F prints share the top of the profile.

Profile Analyzer Hint: Look at actual profiles to double check if they correspond to the question that you thought you were asking.

Profile Analyzer Hint: View the actual profiles to see if you can spot any patterns. Then , test for those patterns to come up with hard percentages.