A good number of traders will sit on that gap and wait for it to fill before going long while others will wait to see if the prior low is tested successfully first.You can also see the gap in SPY, the S&P500 Spider (more SPY Charts) ETF :
- Added 1/21: For more on Gaps, see chapter 12 titled "Gaps" in Technical Analysis of Stock Trends 9th Edition by Robert D. Edwards, and John F. Magee
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kirklindstrom.com
Can you explain a little bit more about what that gap is? Or what you mean by it filling in?
ReplyDeleteA link to an article would be great. Thanks!
See chapter 12 titled "Gaps" in Technical Analysis of Stock Trends 9th Edition by Robert D. Edwards, and John F. Magee
ReplyDeleteKirk, great Blog!
ReplyDeleteAbout the gap. Yes it is easy to see it on the Barchart charts, but there is no gap on the Stockcharts, since shadows are overlapping. The same, if you are looking at the index ($SPX)
Too bad, that each charting service has different charts. How you know, which chart to trust? :)
Since I'm using only Stockcharts I didn't even see the gap. :(
Anyway, thanks for great Blog!