Look for Floor Trader Pivots
08/06/2008 12:00 am EST
"Floor Trader Pivots" consist of the; Pivot, R1, R2, S1 and S2. These levels are calculated based on the prior days high, low, and close for the market being studied. The pivot, resistance, and support levels, are watched by many institutional traders and they often act as "hidden" levels of support or resistance. When a stock like AAPL finds resistance at the pivot (like it did on Monday 8/4/08) and then breaks lower, the S1 and S2 often act as "magnets" to which price gets driven. You can see that the late day selloff found support at S2 as short sellers began to cover their positions and bargain hunters stepped-in attempting to trade a bounce. This is a great setup for traders to watch for in AAPL and other stocks as well.
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