After many years of doing index arbitrage in the S&P futures (program trading) we noticed that the S&P often moves in 10-handle increments. For example, the S&P opens unchanged at 1194, downticks down to 1192 and starts moving back up. If the low is good the S&P will generally move 10 handles off the low, in this case back up to the 1202 level. That is when the 10 handle rule (market tendency) goes into effect. Ten-handle moves in the S&P also tend to be what we consider “inflection points.” Many times when the S&P reaches an inflection point, exhaustion takes place on the first test, at least briefly. The number of times the 10-handle increments play out depends on the market volatility, but with each 10-handle move, there tends to be a short-term high or low made. We look for this to work in both upside or downside price action.