12:30 (EST) Rule – The price at 12:30 or later in relation to the previous day’s close and opening frequently determines the direction market will take for the balance of the day and on into the next day. The proximity of support or resistance pivot points is also of considerable importance. For instance, consider the following cases.
The price is this example is above all the prior and today’s pivot points. A high close should follow with higher action likely on the following day.
In this example a down close is likely. However, the low of the previous day still exists as a support point.
This action is somewhat indeterminate on direction and suggests a neutral close. Price is between opening and prior day’s close. It had been observed that the price at 12:30 in relation to the opening carries more forecasting significance than does its position related to the prior day’s close.
FOR EDUCATIONAL PURPOSES ONLY. TRADING INVOLVES HIGH RISK.