TIME OF DAY
Through years of trading the SP500 futures market, I have noticed the market tends to act differently depending upon the time of day. Below, is a guide of market PROBABILITIES during these different time periods.
The S&P500 OFTEN MAKES TOPS AND BOTTOMS ON THE HOUR
NOTE: All times Pacific Standard Time
6:30 First Move of Day: Usually opposite of what it intends to do for the first few minutes of trading. Look for double bottoms/tops, divergences.
7:20 If low of day undergoes a test and fails; market should rebound from here through the end of day.
7:30 One of the keys to whole day resides during this time. If there has been a significant move from the opening until this time (10-15 points), with no significant pull back, then there is a strong tendency for a trend day.
8:30-10:30 Dead Zone (lunch break in Chicago and New York): Sideways movement as well as a gradual “drifting” in the opposite direction of the day is common here.
10:30-11:00 Post Lunch Move: Usually continues in the direction it had prior to lunch.
11:00-11:15 Afternoon Move: The high or low of day should undergo a test. If price is reasonably close to extreme of day, it will be tested. If test fails, then a nice counter trend move can be had.
If market comes back 38-50%, then it is likely that the extreme will be tested again. If however it comes back 62-79%, don’t expect it to be tested again.
If NO counter trend move happens at this time, then expect it to happen one hour later.
12:00-12:15 Delayed Afternoon Move: If the market never had the afternoon move, then expect this one to be more decisive and powerful.
12:20-12:30 Often a reversal time and powerful. Usually lasts until end of day.