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Strategies & Market Trends : LastShadow's Position Trading -- Ignore unavailable to you. Want to Upgrade?

To: Nazbuster who wrote (563)	9/22/1998 10:15:00 PM
From: LastShadow	Read Replies (1) \| Respond to of 43080

How do you recognize the opportunities? I'm not sure I understand your question, so let me try answering it the three ways it could be interpreted: Jay didn't know to buy them, he used the gap strategy to set an entry (do a search on SI for lastshadow or jaylyon and gap - that should fill you in on the method if you are unfamiliar with it). We don't conclude anything from the gap down. We set entries or shorts based on the range of the gap from the previous close, or from the first hour of trading if its not a full gap. Gaps in stocks tell us that the mm's are responding to either market forces, stock specific news or buying and selling pressure. If it gaps, what we know from history is that there will be profit taking (either from going long or short, depending on the directiion of the gap) and a sell off (or conversely buy to cover) or a continuation of the climb if the news/earnings/market is substantially stronger. We also know that if it gaps down, there is a threshold point at where recovery means the stock will probably rise substantially, or a floor, that, if penetrated, will continue on down. You don't conclude anything from any gap - you set thresholds of what to do if the price drops below or rises above the boundaries set in the first hour of trading. The identification of those boundaries are defined by the size of the gap and the incipeint volume. lastshadow