Chapter 9
Daily Range Projections
In the early 1980s, I appeared regularly on Financial News Network prior to the daily opening and announced the projected price ranges for various markets. The formula presented below is an enhanced version of the one I used to make these projections. It is the product of many hours of research, and its interpretation is important in defining short-term price movement.
My research has shown that tomorrow's price range is influenced by the relationship between the current day's price close versus the current day's price open. There are three possible relationships between the close today and the open today:
- The close today is less than the open today;
- The close today is greater than the open today;
- The close today is equal to the open today.
If relationship 1 exists, I use the following formula to project the range for the following day:
(High today + Low today + Close today + Low today)/ 2 = X
Tomorrow's projected high = X − Today's low
Tomorrow's projected low = X − Today's high
If relationship 2 exists, I revise the formula as follows:
(High today + Low today + Close today + High today)/ 2 = X
Tomorrow's projected high = X − Today's low
Tomorrow's projected low = X − Today's high
If relationship 3 occurs, I make the following adjustments:
(High today + Low today + Close today + Close today)/ 2 = X
Tomorrow's projected high = X − Today's low
Tomorrow's projected low = X − Today's high
These values merely provide a benchmark for the ensuing ...
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