Gaps have a tendency to fill, and when they do it is an opportunity to profit. This is more of a view of the S&P 500 futures than it is the Dow
Intraday, gaps appearing in the futures market are rare, and their tendency from what I have found is that they fill quicker than the other types of gaps especially for stocks.
This imbalance leads to an extreme (in yesterdays case) demand where prices were quickly bought up leading us into the same resist point where the sell off began.
Now that we are at the origin of this move down (300 points in the Dow) it begs the question if the trend that has been set is still a series of higher lows.
Printing a higher high that is at a level greater than the previous high would mean that we would need to challenge the 2750 level and trade higher from there. For now this is an interesting point of consolidation that if it does resolve to the downside we could start looking for lower price points to (A) cover short positions or (B) create the same kind of buying opportunities that presented themselves today.
Even on the daily view there is a minute head-and-shoulders top forming. The wicks are above, and the buyers are slightly less enthusiastic about retracing the overnight drop.
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