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Strategies & Market Trends : Galapagos Islands -- Ignore unavailable to you. Want to Upgrade?

To: Lazarus_Long who wrote (44095)	7/15/2003 5:59:24 PM
From: Jorj X Mckie	Respond to of 57110

I actually have a suspicion as to why gaps like to get filled, but I don't "know", so I am reluctant to post it. I suspect that you are looking at T/A in general as a set of rules. I look at it as a set of guidelines. I don't expect every gap to fill, but it happens often enough that I don't ignore it. Check out the comments on the defense stocks on DDD on March 12th. dailyduediligence.com You can go back and look at the charts, perfect gap fills and then they started back up. When pondering "why?". Think about it as if you were the specialist for RTN or NOC. 9/11 happens and you have to provide an orderly market for those stocks that have just skyrocketed. Since there would be no sellers, you have to go short the stock to make a market. You're losing money as this stock keeps going up. But as the specialist, you can see the order flow and can see when it dries up. Then you sell a little bit more to roll the stock over. As it continues to fall, you cover on the way down in a way that gives you profit...but to clear your book with a profit, you will need your final covering to be down where the stock gapped up. Once it reaches that gap and you are no longer losing money on those positions, the stock is free to proceed along its merry way. this is pure speculation on my part, but just trying to put some logic into why gaps fill.