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Strategies & Market Trends : The Rational Analyst -- Ignore unavailable to you. Want to Upgrade?

To: HeyRainier who wrote (376)	2/26/1998 1:00:00 AM
From: Scott H. Davis	Respond to of 1720

[Humor talk - Part 2] Rainier, you started a thread, then a humor trend. Let the good jokes roll... Scott Message 3529451

To: HeyRainier who wrote (376)	2/26/1998 9:48:00 AM
From: ftth	Respond to of 1720

Hi Rainier: RE:<< If the stock gaps up and fills that gap, then I would become more bearish and would highly consider closing any open position.>> Not sure exactly what you refer to here, but there's a couple ways to view gaps and their magnitude. In my "opening gap" studies I looked at many variations: yesterday's close to today's open gaps, gap openings above yesterdays high, and gap distance, and a few variations of this. I found there is no predictable significance to a gap opening getting filled-in intraday for moderate and small gaps (< 10 day MA of ABS(close(0)-close(-1))). In fact, for these cases, a very high percentage ARE covered intraday. Gaps only have real significance if they still exist after the close. Large gaps at the opening are a different story. There are many, many different combinations and comparisons of gaps that could produce different results, so my findings are far from being based on exhaustive studies. You could look at sequential gaps for varying #'s of days, Gaps that were filled at the close vs. those that were filled intraday, body-only gaps (open/close only--ignoring h,l), etc. But, having said that, I think I've spent more time looking into it and trying to quantify the more significant cases than the average Joe, so if you could describe the specific type of gap you refer to (not clear whether you meant filled intraday) I'd be better able to agree or disagree as a generalization of my findings. dh