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Are gaps (aka gasps) important?
- Thread starter ljyoung
- Start date
Let me expand things.
As we all know, interday gaps are generally perceived to be more consequential than intraday gaps (depending on the circumstances this may or may not be true).
What is infrequently discussed is the great utility of the extrema of the 2 bars (candles or sticks) which define the gap. Check it out - like in the chart of the Opening Post (OP). So the question is how will the boundaries hold up not just how the gap itself will hold up.
lj
As we all know, interday gaps are generally perceived to be more consequential than intraday gaps (depending on the circumstances this may or may not be true).
What is infrequently discussed is the great utility of the extrema of the 2 bars (candles or sticks) which define the gap. Check it out - like in the chart of the Opening Post (OP). So the question is how will the boundaries hold up not just how the gap itself will hold up.
lj
This gap phenomenon is fractal (for both tic and time interval charts), BUT if you are using tic charts it can be very difficult to use if the tic count per bar gets too low. What's too low? This depends on the total volume of tics amd on the tic volume velocity and it will change from day to day.
I have observed the "extrema" phenomenon many, many times but one must have a high quality raw data feed to make full and appropriate use of this observable.
lj
A little Learning is a dang'rous Thing;
Drink deep, or taste not the Pierian Spring:
There shallow Draughts intoxicate the Brain,
And drinking largely sobers us again.
Alexander Pope, An Essay on Criticism
I have observed the "extrema" phenomenon many, many times but one must have a high quality raw data feed to make full and appropriate use of this observable.
lj
A little Learning is a dang'rous Thing;
Drink deep, or taste not the Pierian Spring:
There shallow Draughts intoxicate the Brain,
And drinking largely sobers us again.
Alexander Pope, An Essay on Criticism
Hmmmm. What are the BSD's up to?
5-1-07: Close = 13288; Low = 13190
5-2-07: Open = 13300; High = 13399
7-27-07: Close = 13284
7-30-07: Open = 13287
The lowest low since 5-2-07 occurred this AM. The close on Friday was below the close of 5-1-07.
The volume on Friday was < volume on Thursday and so far there is no volume sell signal. So what to watch for?
1) IMO, today's close is rather critical.
2) If YM closes down from Friday we have the dreaded "Down Friday - Down Monday" [nicely discussed in the Hirschs' "Stock Trader's Almanac" but I'm sure, free somewhere on the web]. This market barometer is traditionally derived from $INDU but can reasonably be extrapolated to YM, IMO.
lj
5-1-07: Close = 13288; Low = 13190
5-2-07: Open = 13300; High = 13399
7-27-07: Close = 13284
7-30-07: Open = 13287
The lowest low since 5-2-07 occurred this AM. The close on Friday was below the close of 5-1-07.
The volume on Friday was < volume on Thursday and so far there is no volume sell signal. So what to watch for?
1) IMO, today's close is rather critical.
2) If YM closes down from Friday we have the dreaded "Down Friday - Down Monday" [nicely discussed in the Hirschs' "Stock Trader's Almanac" but I'm sure, free somewhere on the web]. This market barometer is traditionally derived from $INDU but can reasonably be extrapolated to YM, IMO.
lj
Quote from ljyoung:
This gap phenomenon is fractal (for both tic and time interval charts), BUT if you are using tic charts it can be very difficult to use if the tic count per bar gets too low. What's too low? This depends on the total volume of tics amd on the tic volume velocity and it will change from day to day.
I have observed the "extrema" phenomenon many, many times but one must have a high quality raw data feed to make full and appropriate use of this observable.
Are you prepared to show evidence of this, or is this all belief & anecdotal?
"Gaps are fractal" is a fluffy phrase. Gaps are simply that prices can move when there is market closure/suspension, or that volume is too light, regardless of the time scale. That doesn't mean it helps you, especially without any proof.
This gap phenomenon is fractal (for both tic and time interval charts), BUT if you are using tic charts it can be very difficult to use if the tic count per bar gets too low. What's too low? This depends on the total volume of tics amd on the tic volume velocity and it will change from day to day.
I have observed the "extrema" phenomenon many, many times but one must have a high quality raw data feed to make full and appropriate use of this observable.
Are you prepared to show evidence of this, or is this all belief & anecdotal?
"Gaps are fractal" is a fluffy phrase. Gaps are simply that prices can move when there is market closure/suspension, or that volume is too light, regardless of the time scale. That doesn't mean it helps you, especially without any proof.
Gaps are simply that prices can move when there is market closure/suspension, or that volume is too light, regardless of the time scale.
I don't understand what you are saying here (?do you mean "can't move"?). If that is what you meant to say, then are you saying further that your definition of a gap is something (a price void perhaps) which occurs when there is a market closure (what is a market closure? How often does that happen?) or market suspension (when does that happen?) or that volume is too light (too light compared to what?).
TIA
lj
What with the DF-DM nasty out of the way for another week, we can now expect that whatever is going to happen, is going to happen. Would a close above the upper "post" of the 5/1 - 5/2 12 point gap be bullish? Possibly, but before getting too carried away if that happened, it would be prudent to check the EOD volume (it looks kind o' weak right now).
So moving right along then, how big does a gap have to be before it is "significant"? Like is the 2 point gap on 7/2 - 7/3 meaningful, especially since it was filled on 7/4?
As always the market will let one know. Is one's observable a pile of fresh cat crap or is it something better than that - like crusty, week old cat crap?
lj
So moving right along then, how big does a gap have to be before it is "significant"? Like is the 2 point gap on 7/2 - 7/3 meaningful, especially since it was filled on 7/4?
As always the market will let one know. Is one's observable a pile of fresh cat crap or is it something better than that - like crusty, week old cat crap?
lj