Hubert Senters here.
Let’s take a look at the Dow. Currently it’s up $453 points and really the discussion in this video is going to be centered around gaps and when to take them and when to leave them alone so. As you can see this is above the cloud so your assumption with gaps should be if you place the data a gap up situation will tend to run away from you and know where it’s not filled the gap.
Let me go to an intraday chart to explain this but before we jump over there just remember that the Dow is in a major uptrend so is the Nasdaq. Let’s use the Nasdaq. It’s even better example. So what I’m going to do is I’m going to go create a clean chart on a 2 minute chart on the Nasdaq. Now, we’re looking into this. This is a Nasdaq. And it’s NQ at Nasdaq. NQ.D so it’s got a gap associate with it. There’s not always a gap.
So like yesterday’s gap down in the Nasdaq you gap down and it almost filled it and here’s the gap stats. About 82 percent of the time a half a gap fill will take place about 60 to 62 percent of the time the full gap fill and actually fill it today. So if we look at that and then go look at the YM @YM.D same situation.
It’s got a gap up. The likelihood of it doing a half a gap fills 82 percent but it’s less likely because the gap up and we’re in a major uptrend in that one. So a gap down situation in my mind would have a better chance of back filling and then going. Now, you reverse those rules for short so if you’ve had a massive downtrend then you would have breakaways to the down side and the gap ups would be more likely to fill.
Mark Helweg is going to be given a talk over at Wealth 365 live online event. It’s going to explosive pattern for trading options. I’m going to HYPERLINK you to the registration page and you can see Mark get his talk.
Good luck. Hope it helps. See you on the next video.
Hubert.
