Single Print question

On wednesdays trade ( 3/29/06)in the S&P we had single prints from about 1310 - 1307...I don't have MP so that's as close as i can get with the numbers...anyway my question is theoretical...suppose today (Thursday) we opened at 1304. Should those single prints now become resistence if we rallied up to them and if so at what price...1310 or 1307? If the single prints imply that a strong buyer came in and moved the market quickly to form those single prints then what does this strong buyer do when we open below those single prints and trade back into it the next day......Thanks

Bruce

If the single prints were formed below us and then we open below those single prints then they are considered filled and are not used as "support" lines - although I understand you question because now they are above us so: Are they now resistance lines?

I don't believe that they are. I think that this happens so rarely that nobody has tested or documented it.

To answer your question about where it would be: The single remains where it was first formed which I believe in this case was 1307.

Bruce. if single prints above and market below. then that is what is referred to as minus development. so you would expect the single prints to hold resistance. if the single prints are gobbled up then something else is happening. entry point into the single prints is determined by previous volume in those single prints in that if they are going to hold then they should leave one or more of the prints unfilled. Look in the volume for an inflection point and lean a tic or tic in front

If I understood Bruce correctly, what he was referring to was Single Prints that filled before the open.

So, say we have a Single Print below us at 1301.25 that was created on day 1 and the market closes at 1305.00 on that day. So we now have a support reference line at 1301.25

The following day the market opens at 1295.00. The question is: Has that (broken) support line at 1301.25 (implicitly broken because we opened below it) turned into a resistance line above us? i.e. Do we still watch that line or just erase it from our charts / white board?

Correct Guy...you have interpreted my post correctly...I know what I would do If I had a chance to "get out " at break even after a gap down...I'd become a seller...

Bruce

In theory that certainly sounds like the right thing to do. I'd like to know the answer to the question though - Has that become a high probability resistance line?

I'm fairly certain that no one has ever tested this. I have written code that identifies Single Prints and it is notoriously more complicated to write that logic than you would initially think so I would be surprised if Single Print identification is in other software.

Also, this type of even happens so rarely that the time spent writing the code to test it probably wouldn't justify the edge that it gave you because of the rarity of the trade. You could probably only trade this 2 or 3 times a year at max.

Well today was a great example..in S&P's..Thursday July 27th trade left single prints from minus developement ( breakout to the downside) at 1272.75 - 1273.75...Today (july 28th) we opened slightly above this area traded up to the point of control and high volume area, then came back down and tested the single prints from yesterday and it was a moonshot.....too bad I missed it...lol...anyway in this one particular case the single prints left from yesterdays selling became support when we opened above them........just an FYI...very cool

Okay, here is yesterday's profile:

128175 D
128150 D
128125 D
128100 D
128075 D
128050 D
128025 D
128000 DG
127975 DGH
127950 DFGH
127925 DFGHI
127900 DEFGHI
127875 DEFGHIJ
127850 DEFGHIJ
127825 DEFGHIJ
127800 DEFGHIJ
127775 DEFGHIJK
127750 DEFGHIJK
127725 DEFGHIJK
127700 DEFGHIJK
127675 EFGHIJK
127650 EFGHIK
127625 EFGIK
127600 EFGIK
127575 EFGK
127550 EFK
127525 FKL
127500 FKL
127475 FKL
127450 FKL
127425 FL
127400 FL
127375 L
127350 L
127325 L
127300 L
127275 L
127250 LR
127225 LR
127200 LPR
127175 LMNPR
127150 LMNPR
127125 LMNPR
127100 LMNPR
127075 LMNPR
127050 LMNPR
127025 LMNPQR
127000 MNPQR
126975 MNPQR
126950 MNPQR
126925 MPQR
126900 MPQR
126875 MPQR
126850 MPQR
126825 MPQR
126800 PQ
126775 PQ
126750 PQ
126725 PQ
126700 PQ
126675 Q

VAH= 128150
POC= 127700
VAL= 127100

So the single was 1273.75

And today's profile so far:

128500 K
128475 JK
128450 JK
128425 JK
128400 HJK
128375 GHIJK
128350 GHIJ
128325 GHIJ
128300 GHIJ
128275 GHIJ
128250 GHIJ
128225 GHIJ
128200 GHIJ
128175 GHI
128150 GHI
128125 GI
128100 G
128075 G
128050 G
128025 G
128000 G
127975 G
127950 G
127925 G
127900 G
127875 DG
127850 DFG
127825 DEFG
127800 DEF
127775 DEF
127750 DEF
127725 DEF
127700 DEF
127675 DEF
127650 DEF
127625 DEF
127600 DEF
127575 DEF
127550 DEF
127525 DEF
127500 DEF
127475 DEF
127450 DEF
127425 DEF
127400 DEF
127375 EF
127350 EF
127325 EF
127300 E

VAH= 128475
POC= 128375
VAL= 127625

Shows the low of day (so far) just 3 ticks below the single that formed yesterday.

Well this holds the theory that resistance becomes support once broken and support becomes resistance. I admit, however, that no one has ever pointed this out to me before so this is something that needs to be watched and observed.

One of the other things about this setup is that I believe it is a fairly rare setup. How often does the market create a single on one day and then open on the "wrong side" of the single? I'm going to guess that it is less that once a month. If this is the case then that will probably account for why traders rarely watch it.

However, this could be another style of trading altogether that could be very profitable. Find lots of signals that happen very rarely but are high probability setups, like this one could be for example. If you have 20 rare setups that happen on average once every 20 trading days the you will have on average 1 setup per day BUT that setup may be a very good one and also one that no one else watches because of its rarity.

Single prints should really be referred to as minus development. Now armed with that knowledge go read Steidlmayer's sections in his books on minus development

The reality is that minus development affords an "easy" trade in that you have a good degree of probability that on first test they hold. It is rare that the market slashes and burns up then down back through. That is much more likely to happen with late running profiles instead.

Guy you referred to the single in the example given of 1273.75 but you should refer to the range of the minus development (vertical) and as was demonstrated the range was eaten up leaving one price untouched namely 1272.75.
The stop would have been depending on your style of risk management a few ticks below the 1272.75, or perhaps a case of estimating whether you were outstaying your time and therefore welcome in the market or perhaps on a rotation through a previous time bracket. Always stops are determined vs previously known reference points

On the odd situation where the market one day has gone up then the next day opened on a reversal ..well that just means initially that they made the bears pay and next it was the turn of the bulls to suffer. In the example cited if one were to gap back down through then yes initially the origianl single prints would then become resistance however if the market could not get away from that area then over the next one/two days the market would fill out the centre of that minus development and turn it into a high volume price and you would likely get the action that resembles a triangle

Those are all interesting aspects of this structure to look at but require require the naked eye; for example the minus development and how much of it fills in.

When someone asks a question like Bruce did here which highlights a rare market sitution/setup I want to ask questions like:
- How many times has this happened in the past? (average occurance)
- What type of general market does this happen in?
- How often did the setup playout?

Sometimes you need to use a hybrid of eyeballing and automated techniques. In this case you would isolate the dates using the computer and then see what happened on those days by eye.