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10 HANDLE RULE

Over many years of watching the S&P we believe that the S&P often move in 10 handle increments.  For example, the S&P may open at 1194, trades up & down & all around.  By mid-morning it makes a low of 1188 area. The equities then proceed to retest THAT 1194 area and slowly trend higher throughout the midday (to our previously mentioned resistance area) 1198 (1188 + 10) area. That is when the 10 handle tendency / rule goes into effect. Often times the S&P market will reverse as a bit of an exhaustion takes place. This depends on the level of program trading but at each 10 handle move there tend to be a bounce or even a low made close to the level. This works in reverse on the upside.