分类:ORV

Opening Reversal.

• 80% of days, market test support or resistance in 1st 90 minutes, and the Reversal often becomes high or low of day.
• 80% of days, the market opens have reversals (Opening Reversal, indicating the end of the trend from the open), which means Trend From The Open lasting all day Only 20% of day^[1].
• Generally, when there is a strong BO on the open, the market Reverse in 50% of days, No Matter How Strong the initial BO looks like.
  • When the context is right, the chance of a successful reversal can increase to 60% or higher. For e.g. if the open has a selloff for around 18 bars, and market forms a possible consecutive parabolic wedge bottom, and there is a huge bear bar late in the bear trend, there is 60% chance of a successful bull reversal or 1 more leg down and then reversal. See example in Gap Up and Sell Climax, Then Reversal Up. Other factors that can increase the probability:
    1. Yesterday was a bullish day
    2. Gap up on open
    3. The sell climax from the open has big bars or consecutive sell climaxes, indicating more bears probably get exhausted
    4. Good looking entry bar and FT, especially when the reversal comes from major support levels, such as LoY, HoY, etc.
    5. PB of entry bar looks weak for the bears, some bears will sell the 1st reversal at EMA and the results will be a PB, PB can not take out the low of the entry bar
    6. other minor details such as gaps, tick gaps, etc.