Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Chris who wrote (22708)	4/11/2000 4:32:00 PM
From: Robert Graham	Respond to of 42787

I find some think the gap is what appears visually on the chart as a gap formed by the price bars. But a gap opening is actually from the close of the previous day to the open of the gap day. This is the gap that is frequently filled. Here I have seen the market close the more obvious visual gap to then come back and close actual gap before continuing its trend. Also I find that a gap can be considered closed if price moves to a key support or resistance where the actual gap may not have closed. This can be the high of the previous trading day, for example. Once this key support or resistance is touched, then price may continue its trend at that point. So gaps can be considered subjective and are best evaluated with respect to the current market conditions which includes price action. If a gap is not filled before price rallies, price at a later time can fill the gap. This tends to happen in congested markets and extended pullbacks that may resume the trend after all gaps in proximity are filled. Gaps do not tend to be filled in very strong markets. And how some traders point to how it can be filled several months later is meaningless to the trader of the shorter time frames. I look at gaps similar to any other market event, and see how the market responds to the appearance of a gap. This can tell me allot about the buying or selling interest that is present in the market. As a day trader, I am more interesting in seeing what happens the same day that the gap opening is put in, and in particular in the first hour of trading. In some markets, what happens to the gap in the next couple days may also be relevant. When on the day of the gap the market is moving back to close the gap, I look at obvious levels of support like the midpoint (MP) or the bottom of the gap, and any nearby H/L that can act as a reference to the market. At a later time, when price appears to continue a retracement beyond what I would consider normal in the current market conditions, I then may look to pervious gaps that may be acting as magnets to price action. Also do not forget there are gaps that can be put in during the day. Thus type of gap can be significant to the day trader. As with daily and weekly gaps, it all depends on how the market is trading in the respective time frame. Also some even consider "filled" gaps to be of significance on charts. Just some observations and thoughts. Bob Graham PS: There are what I refer to as "laps" that also like gaps can be significant events on an intraday chart. This is where the previous bar closes below its high to be followed by the next bar that opens at the previous bar's high.