Since the NDX closed at the high of day yesterday and it was a Reversal Day (A Reversal Day and not a Key Reversal). This reminded me of a study I did a few years ago. I wanted to know if there was a statistical way to predict the future price direction based upon where the daily bar closed in relationship to the entire bar. If the closed is in the top 10% of the bar what was the odds that it would take out the high of that bar before it took out the low of that bar in the next few bars. I did the study on the NDX and SPX. On the NDX if the bar closed in the top 10% of the bar there was a about an 81% of this happening and on the SPX there was about a 78% chance. The percentages were about the same on the downside. Just a note, if an OVB (Outside vertical bar – High to Low engulfs the previous bar) follows a bar it was considered a failure. This happens about 9% to 10% of the time on these indexes. The study was only done on these 2 indexes and for daily data only.

Funny how many times the same questions get asked. This might help... http://lightning.he.net/cgi-bin/suid/~reefcap/ultimatebb.cgi?ubb=get_topic;f=4;t=000268

Hayseed I have checked for bar values that close closer to the end of the bar (Less than 10%) and it does not significantly increase the hit rate. What it does do is significantly decrease the number of occurrences. This study covers the last 16+ years of data. One more comment about OVB. This information can be helpful for those people that place stops based upon the height of a bar. Since an OVB occurs about 9 to 10% of the time (These indexes) that is the odds of getting whipped sawed. Again the study does not know if the high or low is taken out first.

Wabbit That was great introduction to statistics. I'll futz around w/ Newmont Mining vs. Crude and Spot Gold and see what I come up with. Thanks, J PS -- Glad to see Reef Capital is back up and running. They were down and I lost track of them.