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Daytrader is divided into 8 sections -- A price line display and 7 boxes, each containing a different type of technical information.
The Price Line Display
The left column of the Daytrader letter is a price line, divided into equal price increments, centered around the previous day's settlement. Along this price line are letters representing the locations of the technical points from the sections below. VMA point levels are indicated by series of "*" symbols.
Previous Highs/Lows (P)
The "Last (#) High" and "Last (#) Low" indicate the prices of the latest four minor highs and lows, with (1) being the most recent. These prices, along with contract, monthly, and weekly highs and lows, often help define near term areas of support and resistance.
Momentum Indicators
RSI, or Relative Strength Index, is a popular over-bought/over-sold indicator which signals, on a scale of zero to 100, the degree of any market's vulnerability to a technical correction. A high RSI value indicates an overbought market while a low value signals an oversold condition. An RSI value around 50 indicates a market in equilibrium. Unlike many other technical services, the DayTrader uses raw RSI values (i.e., they are calculated from the full data set each day and not smoothed by shortcutting) as they tend to be more responsive and show a broader range than smoothed RSI calculations.
An oscillator (Osc.) is the difference between two moving averages of the settlement, and displays an over-bought/over-sold condition on a positive to negative scale unique to each market.
An oscillator value around zero shows the market in balance, while values far above or below zero indicate a high likelihood of a technical correction against the current trend.
10-Day Average Moves (A)
"Open to High" is the 10-day average of the distance the market has rallied from the opening. "Open to Low" is the 10-day average of the distance the market has broken from the opening.
"Settle to High" is the sum of the previous close plus the 10-day average of the distance the market has rallied from the previous close. "Settle to Low" is the sum of the previous close plus the 10-day average of the distance the market has broken from the previous close. "10 DMA Range" is the 10-day average of the distance from the market's daily high to low.
Fibonacci Points (F)
This section offers the first three Fibonacci support and resistance points based on yesterday's range, settlement, and the Fibonacci ratio of .618. The Key Price (high+low+close/3) serves as the base point to determine range support and resistance.
Moving Averages (M)
These are the most commonly used moving averages of settlement prices, highs, and lows. The "Turns (#) DMA" prices represent prices above or below which the market must close in order to turn the appropriate moving average up, if the market is lower than the average, or down, if the market is currently higher than the average.
Swing Points (S)
Minor Swing High and Low represent the near term price projection and retracement targets, and Swing Critical represents the price through which a failing minor trend should not trade, all based upon near term swing analysis.
Scalpers points are the spread of yesterday's range adjusted for market direction.
VMA (Computer) Points (V)
VMA Points are computer generated points of support and resistance based on formulas which are proprietary to Vitcom, Inc., the publisher of Daytrader.
Optimum Resistance High and Optimum Resistance Low define the inside and the high extreme of an area above the previous close which the computer considers the most probable resistance zone for the next day.
Optimum Support High and Optimum Support Low define the inside and the low extreme of an area below the previous close which the computer considers the most probable support zone for the next day.
Secondary Support and Resistance indicate additional but secondary support and resistance areas offered as error direction indicators (i.e., if the optimum points are in error, they will most likely error in the direction of the secondary points).
Range Reversal/Range Key are used in combination as a minor trend reversal indicator. A one day move which exceeds the Range Reversal distance, from high to low or vise versa, against the current minor trend, signals a probable change in minor trend direction. A market is more likely to experience a significant Range Reversal during times when the Range Reversal value closely approaches the Range Key value.
Open-Rally High/Open-Rally Low are two values which define the extremes of the distance at which a market is likely to find resistance above its opening price.
Open-Break High/Open-Break Low are two values which define the extremes of the distance at which a market is likely to find support below its opening price.
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