I've been playing with the idea that the market moves using a particular "unit of movement", which changes each day.  Some days it seems looking at the range from the Previous High to the Previous Close, then drawing lines using that range often gives support and resistance levels.  Sometimes it's the Pivot Point and the Close, or perhaps the entire High to Low range.

So, to help in this analysis, I built a tool.  The chart below is yesterday's (2/17/2011) ES, 15 minute chart.  The light blue background is overnight trading.  You can see the range from the previous day's High to Close by looking at the red arrows.  Using this "unit of movement", I draw additional lines, which are all the blue levels.  Half-units are the thin lines.  All the small, blue arrows show areas of interest where there was support and resistance from these levels.

You can see the buttons on the bottom of the chart, where I can easily change which levels are drawn.  In this case you can see the "H" and the "C" are highlighted, showing that the levels are using the High and Close range.  (scroll down...) 

So, this is dandy and all, but we have computers to allow us to do more.  So, I took it one step further and had the script calculate all levels for all combinations of selections (H-L, H-C, H-PP, L-C, L-PP, etc), then had it look for overlaping levels.  This still produced a lot of levels, I had it trim down a couple more times and came up with the chart below (same day, same chart).  The red lines are the levels with the most overlapping levels using the method desribed above.  Interesting! (scroll down...)

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