markets never GAP open anymore

C

canadian_dude

Notice how the markets never gap open either up or down anymore? Every day for the last 6 months its the same thing, the markets basically open at the same level they were at the closing bell the day before.

This is a fundamental change, particularly for the Nasdaq markets. For 4 or 5 years, the Nasdaq market gapped up or down at the opening by 2%, 3%, even 4% and more. All it took was one quarterly report from Intel or even Yahoo to move the markets 4% in after hours trading.

But that never happens anymore. Even a 1% gap at the opening is huge these days, it almost never happens. So what happened to effect this change? Did traders stop trading heavily after hours, thereby moving the markets? Or was it just all a factor of the rapid rise and fall of the Nasdaq market, a phase which has now seemed to have ended?

Because the openings for the last 6 months are a totally different environment than the openings the past 4 or 5 years.
 
Quote from canadian_dude:

For 4 or 5 years, the Nasdaq market gapped up or down at the opening by 2%, 3%, even 4% and more. All it took was one quarterly report from Intel or even Yahoo to move the markets 4% in after hours trading.

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3%? 4%? what market were you watching? I don't remember gaps like that except after September 11th.
 
Quote from blackguard:



3%? 4%? what market were you watching? I don't remember gaps like that except after September 11th.
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Then you've got a bad memory. The Nasdaq 100 market gapped open by MORE than 4% on 28 openings from 1997 through 2002. This included a gap opening of more than 6% on 4 occasions. And the 9/11 to 9/17 period when the market was closed was not the largest gap, it happened a few days later on 9/21 when the market gapped down 6.63%.

And how do you explain why it gapped down 6% on 2/16/2001, or gapped up 6% on 4/11/2001. Probably Yahoo or Amazon said something positive after hours, and it drove the whole market, that's what used to happend.

Like I said, it used to move around like crazy in after hours action, but that never happens anymore. Today was another classic example, it opened up less than 0.1% higher than the close yesterday. And this is happening every day now for a long time. It seems we have entered a new era where the Nasdaq 100 will be a much more stable basket of stocks.
 
Index volatility has changed .... However there are still many volatile individual stocks and sectors. Things change - like the NYSE program trading volume. If necessary just move to other issues .....
 
Quote from canadian_dude:



Then you've got a bad memory. The Nasdaq 100 market gapped open by MORE than 4% on 28 openings from 1997 through 2002. This included a gap opening of more than 6% on 4 occasions. And the 9/11 to 9/17 period when the market was closed was not the largest gap, it happened a few days later on 9/21 when the market gapped down 6.63%.

And how do you explain why it gapped down 6% on 2/16/2001, or gapped up 6% on 4/11/2001. Probably Yahoo or Amazon said something positive after hours, and it drove the whole market, that's what used to happend.

Like I said, it used to move around like crazy in after hours action, but that never happens anymore. Today was another classic example, it opened up less than 0.1% higher than the close yesterday. And this is happening every day now for a long time. It seems we have entered a new era where the Nasdaq 100 will be a much more stable basket of stocks.
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28 divided by 5 * 252 = 2.22%

That's minuscule
 
Quote from Satyrican:



28 divided by 5 * 252 = 2.22%

That's minuscule
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Yes, a miniscule amount of very large moves. I was responding to a post that said they couldn't recall any 2% or more moves. So I responded by pointing out all the moves of 4% or more. But if you looked at all the 2% or more gap openings, there would be hundreds of them during that era. The point is, that just doesn't seem to happen anymore.
 
I've noticed the same thing. I believe that the basic reason is that tech stocks are just not bubbling anymore like they were. After this bear, Joe investor is shellshocked and doesn't want to get near tech anymore. People are not going to get as excited as they once did. The last time they got excited about buying tech they got killed. Sobriety makes for a dull party.
 
Since Feb. 1, 2001--about the time Nasdaq volume began to be figured differently.

Gaps Up:
0% to <1% = 237
>1% to <2% = 55
>2% = 18

Gaps Down:
>-1% to 0% = 251
>-2% to <-1% = 52
<-2% = 18

Bruce
 
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