Setups for Stalking the Market

A very high probability setup is based on the observation that when a market closes in the top part of its trading day, it has a strong chance of opening higher. The opposite is also true. This is an extremely high-probability setup with 70 to 80 percent reliability for a more extreme opening in the same direction the next day. This could be used for an exit in a trading system, but it also can be used for "Gap Trading".

Another observation is that even though there is a higher probability of the market opening up in the same direction, the probability that it will close in that direction is much lower. In addition, when you have a trending day yesterday, there is an even greater probability of turnaround.