Quote Originally Posted by kingsmill22031 View Post
Billy,

I've read this entire thread twice over the past several days (since you wrote it), to include all the comments, and I'm wondering, without disclosing how you calculate it (which you say is proprietary - and, I'm not asking for disclosure of any type of your techniques), is there any way you could possibly define the term "cluster", other than "bands" where one could expect the highest volume of trading activity to normally occur? Also, once you define them, can I presume that they must be redefined every day (which is what I presume you have to do)?

John
John,
We define a cluster of pivot levels as those levels that are close together. "Close together" is defined by all pivots within the Average True Range (ATR). The original basic cluster of the methodology is therefore the ATR. For the robots, we have optimized both the ATR and some multiple of it for the best correlation with the underlying ETF’s normal behavior.
This allows for measuring precisely the support and resistance pressures for the next trading day only within a “normal” daily trading range. So, yes, they must be redefined daily. A breakout above a stronger cluster resistance than support is the proof that large players are showing conviction in their accumulation and that market makers/ HFT are forced to follow their steps. The higher the volume and money flow when it happens, the better.
Billy