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Technology Stocks : Intel Corporation (INTC)
INTC 40.56+10.2%Nov 28 9:30 AM EST
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To: Wildcat who wrote (96463)1/17/2000 2:17:00 AM
From: nihil  Read Replies (2) of 186894
 
Stocks go up and down. As J.P. Morgan said, "They will fluctuate!" Gap theorists need to explain why a gap creates a need for a stock to go up or down. In the ordinary working of the markets the traders prevent gaps from appearing because prices change by the smallest unit (teenies) from second to second. Traders are always offering stock at a teeny higher, or to buy at a teeny lower. If you look at the ECN's you will see that it is impossible for a NASDAQ stock to gap during the trading day. There are always bids and asks spread around the market price. Once the market closes there are always bids and asks in the aftermarkets for some stocks, although the spread is sometimes several points (i.e. constitutes a gap.) I have on some occasions arbitraged those gaps -- they close very quickly. Between the close of the daytime market at 4:30 EST and the open at 9:30 there may likely be a gap (since traders usually close out their positions), but there is nothing that makes a trader try to fill the gap.
The gap is an unavoidable result of some significant change during the period the market is closed. I would love to see some studies of daytime gaps, correlated second-by-second with the outside news. This is especially need with extended hours trading. The excursion of INTC down to 86 and up to 96 immediately after the earnings report on Thursday was a classic.
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