dc, opening prices have NOTHING to do with key reversal days. nor does needing a 52 wk high, or any time length high or low.
airedale88,
I respectfully ask, what is the best definition of a key reversal? It seems that some definitions confuse it with outside formations.
One thing that does seem important is to put it into context, such as the condition of the internals, as well as to other indices.
regards,
jmicou
dcengr: I have some s/w that automatically calculates KRD's. It's definition of KRD is:
"A KRD sometimes occurs as the top or bottom day of a significant move in the markets. A top KRD will be colored red for the top half of the bar which will be green on the lower half. A bottom KRD will be colored red for the lower half of the yellow bar.
If a market is moving up, the KRD will open higher than the previous close, move higher and then close lower than the previous close.
If a market is moving down, the KRD will open lower, move lower and then close above the previous close. KRD’s tend to be more meaningful at lows than at highs.
When first programmed the KRD, they showed up all over the chart. Therefore, we put in a number of filters that got rid of most of the insignificant KRD’s. For example, a KRD will have to be the lowest low for the last so many days. We allowed some tolerance for the open to be allowed a small range relative to the previous close. Another filter is that a low KRD must be a yellow day. There were all so a few other filters. Of course everything we pointed out for a low KRD also applies to a high KRD.
With all of these filters working, when you see a KRD, it should be a red flag that the trend may have become exhausted. This is the first indication you can get. If it is followed by a color change, then it is time to tighten up stops.
I looked over my charts and, in my opinion, works better on commodities rather than indexes. However, the
dates for the DJIA are: 1/8/07, 1/3, 12/26/06, 12/7, 11/28, 11/20, 9/29, 9/21, 8/10, 8/4, 7/18, 7/7, 6/30, 6/28, 6/19, 6/14, 6/2, 5/24, 5/15, 5/1, 4/7, 3/21, 2/17, 2/6, 1/3, 12/15/05. For the S&P: 1/25/2007, 1/16, 1/10, 1/8, 1/3, 12/7/2006, 11/28, 11/9, 9/29, 9/21, 9/11, 8/10, 8/4, 7/27, 7/18, 7/7, 6/30, 6/28, 6/14, 5/30, 5/24, 5/19, 5/15, 5/1, 4/7, 3/8, 2/21, 2/8,1/25, 1/23, 12/27/2006. Sorry for the reverse date order, bu I was having to read them off my charts. Let me know if I can be of any help... Mike
Lead, Follow or Get Out of the Way...
Be Sure to Perform Your Own Due Diligence