After reading some of John Carter’s articles in Stocks, Futures and Options Magazine I was looking forward to reading his then upcoming book “Mastering the Trade: Proven Techniques for Profiting from Intraday and Swing Trading Setups“. It was obvious from his articles that John had some good insights into how the markets work [...]

This is in response to a comment that Jon left the other day about how I deal with gaps (sorry for the delay Jon). The title is meant to be a joke. I didn’t think I despised gaps but Jon’s question really made me think about why I feel how I do about [...]

David Nassar has written a good article about how to trade stocks that gap. He argues that if a gap is more than 5% the more will continue in the direction of the gap. He also examines the mindset (psychology) of traders who play gaps:

A gap is a term used by technicians to [...]

Now matter how good the news is, or may seem, at the open I’ve found that it usually pays to wait 30 to 60 minutes to see if sellers step in. On these type of gaps, right into resistance areas after a big gain, this tends to happen more often than not:

I don’t know [...]

NFLX has now essentially closed that gap from the earlier “good” earnings news. In honor of Mike, I thought I would drop a mandatory “NFLX presents yet another example of how dangerous it can be to chase stocks that gap up in the morning.” But I must also extend an olive branch to the NFLX [...]

I’ve been having a discussion with Charles about using candlestick analysis on the chart of EWJ, which is an exchange traded fund (ETF) that tracks the MSCI Japan Index. Charles pointed out the large number of open windows (gaps) on the chart which should serve as support/resistance. I brought up the question of [...]

Today’s gap up and subsequent sell-off made what called a ‘Gap and Crap’, a.k.a. ‘Gap and Trap’. (Funny that StockCharts.com’s annotation tool turned ‘crap’ into ‘—-’. Pretty slick of them.) It sucked in over-zealous buyers at the open and trapped them in losing positions. As some of you know, I have [...]

I thought I’d walk through the NASDAQ chart for the last month or so to show you how I came up with my game plan. This chart will look a bit different than the charts I usually post because I’m showing Guppy’s Multiple Moving Averages instead of just showing the 10, 50 and 200-day [...]

Here’s another good (and timely) article by Dave Landry — Opening Gaps: Trade ‘Em, Fade ‘Em, Or Ignore ‘Em?
(I’ve archived the article here)

Tags: Dave_Landry, Gap-Fade, Gaps, Gap_Trading, Opening_Gaps

I’ve had this rule taped to my monitor for the past 3 years: On gap-up openings, buy above the 10:00 high. That rule has saved be a lot of money. When I started trading, I’d get all excited when I saw the futures flying pre-market. I’d rush in to buy at the [...]