Weekly pivot influence on first trading day

quote:

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Originally posted by BruceM

...I have a friend who will only trade in the direction of the weekly pivot on the first trading day of the week....he uses it like a magnet...so for today he is only taking longs......his is by observation

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I'm curious about testing the general theory of this. I'm typing as I think...

If we took the week's first trading day's opening price and measured the number of points that it traded in the direction of the weekly pivot point and also the number of points it traded away... We might be able to measure a statistical deviance in the direction that it trades. Problems with this theory are (1) the market has an upward bias in the long term (i.e. not symmetrical (2) Market Profile theory can replace this because we are probably trading towards the weekly Point of Control which is likely to be near the weekly Pivot Point.

Testing is difficult because we need to compute the first trading day of the week in case it is a holiday and also count the number of trading days in the prior week in case of holidays. For example, last week we had 3 trading days in the E-mini S&P500 because of Gerald Ford's day of mourning. This was an unexpected holiday that is not on the calendars.

What I am thinking of is running a test to see if a rolling 5-trading-day pivot point has any influence on the direction of trade for any particular day-of-the-week. For example, are Monday's more likely to be days where the price is "drawn to that pivot like a magnet" rather than any other day of the week. That should be easier to test...

The market traded to its weekly pivot today ( Monday )..

the market traded to it's weekly pivot this week on Wednesday...

Weekly pivot was traded down to on Monday this week

It traded back last week also

It traded to the weekly pivot this last week too! Seems like we DIDN"T trade back through the weekly pivot only two times in the last 5 months. So good odds so far but I'll keep watching anyway to see how this stands up over time and different market conditions.

Bruce

Thanks Bruce!

They traded to the weekly pivot this week but I "dropped the ball" last week...does anyone know if we traded back to the weekly pivot before we rolled over?

Bruce

They did it this week too...anyone see a pattern here? lol

Bruce

they came with 1.25 points of it today ( Monday ) but the week is young! Out of the 2 or three times that the weekly pivot Wasn't traded too, one week was a fed announcement week....we'll see what happens with this weeks announcement!!

The Russell mini went right to the weekly pivot yesterday (I use the now unpopular HLC/3 method), and sold hard. I was watching the area for another reason, and was curious how the pivot sat right on my area. I've been watching the weekly lately, and find it very interesting when it coincides with my areas. I do the same thing with the daily pivot.

Absolutely! The past 4 months has enabled me to collect some good data and I will continue to do so. Very good exercise!