The Handbook of Technical Analysis + Test Bank_ The Practitioner\'s Comprehensive Guide to Technical Analysis ( PDFDrive )

the hAnDbook oF teChnICAl AnAlysIs

The second case is when the daily close is at the low of the day. Refer to
Figure 10.47:

Pivot Point Level 100 0 0 /3 33 3=++=( ).

In short, if yesterday’s close was at the high, the first support level today will be
at 100 – 66.6 = 33.3, that is, 33.3 percent below yesterday’s high. On the other hand,
if yesterday’s close was at the low, this would mean that the next lower support level
would be at 100 – 33.3 = 66.6, that is, 66.6 percent below yesterday’s high.
Looking at the table in Figure 10.45, we immediately perceive that there are
three main clusters of retracement ratios, appearing around the:

1. 33.3 to 38.2 percent level


2. 50 percent level


3. 61.8 to 66.6 percent level

Figure 10.46 Floor Trader’s Pivot Point 33.3 Percent Level.

Figure 10.47 Floor Trader’s Pivot Point 66.6 Percent Level.