Figure 2.17 Coffee (15-minute bars). Graphed by the "Navigator" (Genesis Financial Data Services).
relationships: that the higher the close is on a bar the closer we are to a top, while the lower the close is
on a bar, the closer we are to a bottom. Here are two of my rules:
1. Most all market highs can be found to occur at or shortly after a market closes right on the
high of the day.
2. Most all market lows can be found at or shortly after a market closes right on the low of the
day.
Got it? Good, now let's look at actual examples of my theoretical concept at work. I will begin
with Figure 2.18, a chart of the Treasury Bond market from 1992. Look at the price turns, which are
pretty easy to see, then focus on the terminal high and low days, at or just before, the end of each up-
and downswing. See it? There it is, the end of the uptrend could be foretold by the mere fact the daily
closes were near the highs of the day, the lows, or end of the downtrend, foretold by closes near the low
of the day.
This is not an isolated occurrence, nor is it limited to daily charts, as the next few examples will
show. Figures 2.19 through 2.23 show, in sequence, a 15-minute chart of the S&P 500, then an hourly
chart, a daily chart, a weekly chart, and finally a monthly chart. In each instance, you
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Figure 2.18 Day T-Bonds (daily bars). Graphed by the "Navigator" (Genesis Financial Data Services).
Figure 2.19 S&P 500 Index (1 5-minute bars). Graphed by the "Navigator" (Genesis Financial Data Services).
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Figure 2.20 S&P 500 Index (60-minute bars). Graphed by the "Navigator" (Genesis Financial Data Services).
