Fall Into The Gap
Why do top traders tell you to be wary of gaps? Today’s action is telling as
to the reason. All gaps are simply not created equal. Some are momentum gaps and
a sign of strength, while others are ripe for a reversal.
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The Nasdaq 100
(
$NDX.X |
Quote |
Chart |
News |
PowerRating) has headed south from the
get go after gapping up more than 20 points from yesterday’s closing tick. How do
we tell the difference between a gap that will continue and one that will wilt?
We don’t. Read the tape, don’t fight it. Swing traders should lock in profits on
at least a piece of a position on the open when good-sized gains are realized, to
protect giving money back on slides like this, and daytraders simply go with the
flow as the trend becomes apparent.
Until tomorrow,
Duke