Pivot Points
Pivot Points are calculated Price Levels that the floor traders, and others who read the tape, like to watch during the trading session. Pivot Points and Levels are Support and Resistance levels, and behave exactly like any historical Support and Resistance level.

As a general tendency, if the day's Price Action starts above the "Pivot", it will tend to stay above the Pivot Support (also called the "fulcrum" of the day's activity). On such a day, Resistance will be met at Price Level R1. Should R1 be broken, the R1 Resistance turns to Support, reversing just like with regular Support/Resistance levels. Further Resistance will then be expected at R2.

The story is all reversed, of course, if the Price Action is below the Pivot Resistance. Support will be met at Price Level S1. Should S1 be broken, the S1 Support reverses amd presents Resistance. Further Support will be expected at S2.

Even from this brief description, it should be obvious that Pivot Levels can be quite useful as a topographical index/tool for selecting and exercising entries/exits and stop positioning for both daytrading and longer-term traders.

Pivot Point Resources

Trade Target Calculator

Trade Target Manual

Pivot Point Calculator with Trade Log

What are Pivot Points and Who Cares (pdf format)

Pivot Point Formula for those who like sliderules.

Pit Pivot Points Calculation

There exist several variations for calculating Pit Pivot Points.
Below is the most commonly accepted set of formulae:

Pivot Point Fulcrum:
Pivot = (H + L + C)/3
Pit Pivot Resistance Points:
R1 = (2 * Pivot) - L
R2 = (Pivot – S1) + R1
R3 = (Pivot – S1) + R2
Pit Pivot Support Points:
S1 = (2 * Pivot) - H
S2 = Pivot - (R1 – S1)
S3 = Pivot – (R2 – S1)

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