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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Dave Shares who wrote (30976)	10/21/1999 5:07:00 PM
From: Jack of All Trades	Read Replies (1) \| Respond to of 99985

Dave, I have had this argument with a few others. Some believe that an index should open at the previous days close. But I am in the other camp. I would like to know who is right or if there is a right or wrong. Jeff

To: Dave Shares who wrote (30976)	10/21/1999 11:40:00 PM
From: donald sew	Read Replies (2) \| Respond to of 99985

David, >>>> I think if one were to take the actual opening prices of the SPX components with proper weighting, the open would be closer to 1275, which would yield a somewhat different pattern <<<< Thats a very valid point. I recall that about 2 years ago that same issue came up. I have been following the DOW and SPX, concerning this issue, but I cant say that I have statistics. It still appears that it works as a reversal signal with OK accuracy. As to why it works my guess is that there was an actual gap to the downside. Regardless of the shape of the candlestick, the was a gap to the downside. Once the gap was filled the downside pressure continues. This is only a guess, so heck if I know for sure. seeya