Sunday, December 25, 2005
The Gap Lady
During the 2001-2002 index congestion period, when I was still at stockcharts.com posting mostly on the NDX/COMPX daily charts, Chip Anderson once referred to me as the Gap Lady, me being, let's say, very enthusiastic in their use.
I made a
Gaps Page that collects a number of educational links, as well as some example charts from my vault, for fellow gap-o-philes. Have a Gappy Christmas!!
Labels: gaps, trading-method
Thursday, April 15, 2004
Candle Gaps
This image was originally post to the dacharts site as a way of showing not only gaps but as an illustration of candles and price actions. The black fork is drawn in now that significant price pivots have been made.
Click for larger image
Labels: gaps
Thursday, February 27, 2003
why the gap...
The entry before this was from November! Why the gap?
Late July we started a remodel of the basement. Actually, completion of prior work that had not been finished. Everything came together just before Thanksgiving. But the second week of December, the city sewer backed-up and completely flooded the basement, which is actually at street level as the house is on a small rise. Good grief! The contractors came in and tore out everything, absolutely everything. What to say of the many personal effects that could not be salvaged and had to be thrown away as bio-hazard. Two months later, and much upsetting of routines and place, the repair of the remodelling is complete.
The first time around, the discomfort was of our own choosing, so to speak. A flood is an outside disruption, and the element of the sewer only served to escalate the level of discomfort. Naturally we were able to accomodate for the work, but it did put a crimp into the day to day routines so necessary to this business of trading.
I heard a quote from the now 80-year old Norman Mailer, a novelist of the old and fine literary cloth. When asked what advice he'd give to an aspiring novelist, he said to
always have the discipline to do a good job on a bad dayThis is also apt for traders, aspiring or otherwise. The last few months have been quite trying and created not only a physical flood in my home but managed to flood my psyche with all manner of emotional trials and tests. There were more than a few "bad days" and Mr. Mailer's reminder is one I wished I'd recited each day. Trading is so much more than having a tool box full of techniques, an escape route for each trade, a bank roll, and desire or natural talent. It is also having the maturity to bring to each day discipline to overcome distractions, unexpected reactions, and the randomness of life, and the market, in general. I thank the Great Spirit and my teachers for lighting my way.
Labels: gaps
Wednesday, May 08, 2002
Measured Gap Moves
Gadzooks, what a move! As much as I anticipated a move off the 1126-1166 area (9/11 gap plus AB=CB from 1734), not in my dreams did I think "they" would spike it 60 points on the open, and 85 points at the peak!
However.... Not to spoil the NDX party, but "I shoudda seen it"... You can be assured I went scouring the charts for what might have tipped off that move. I believe I found a clue: the 4/22 1365:1385 gap was not to be so easily forgotten.
Measuring from 1573, 1365 is 50% (188 points) to 1157. Yesterdays close was 1159. "The Gap Queen" shouldda seen it!! One way to reinforce what to do "next time" is to do a "Lessons Learned". There is always something new to learn.
To complete the gap story, today's peak ~1266 is just over the 50% rebound of the move off that gap.
So, IMO, today's rally is more unfinished business rather than the start of something new.
Labels: gaps
Tuesday, April 09, 2002
Gap-Down to Slap-Down
Right, gapped down 30+, exuberant reversal, only to be slapped down ~40 points.
Recall that 1356 is the 2nd V of the February VV (the first being 1329). So, while on a 30m or 60m chart an optimist might be seing a double bottom put in, which may in the end be good for a day trade, it's not registering much bullishness on a daily chart. Remember the parade of faux double-bottoms in the April rally?
Labels: gaps
Tuesday, March 12, 2002
Price Island of Longs
I mentioned yesterday that a close below 1532 opens the door to lower lows. I musta been asleep at the console as the gap down open, which created a "price island" on the Nasdaq, was unanticipated. It is not a good sign for bulls. These smallish gaps have backfilled before, only to recorrect after.
Todays COMP low did hit the exact midpoint of the 2066:1697 move (1880), however the NDX punched lower. Being fundamentally skeptical of the new-found bullishness, I tread lightly and while acknowledging the power of bullish sentiment to move price, respect the pull of gravity. Capital preservation remains my guiding light.
One interesting observation is the 60m Nasdaq. I brought back the AB=CD chart, which nicely called the 1330 reversal. Price returned to the "B" high (1564), just at the "equi-time" half-cycle position. It looked like a reversal, at least a pullback, was likely and we got it. I do love when price and time come together, even as sloppy as this pattern was! Now, to better act on these (gg).
Labels: gaps
Thursday, January 17, 2002
Now what...rally and mash
Got the gap up. Now what? Rally into Friday, mash around a bit Monday. Tuesday is where the pedal hits the metal.
Labels: gaps, market-calls-dated
Monday, January 14, 2002
Gaps Study
Sure gaps fill, but unless it is a "common" gap (ie, not a more significant exhaustion or continuation gap), it often doesn't fill the on the first pass.
Gaps aren't only about "filling", they also reflect important support and resistance price ledges that can be exploited by traders.
Here is the April gap study, which includes the recent rally gaps. The gap echo boundaries can be exploited, particularly for shorter term trading, as support/resistance points.
Labels: gaps
