Thanks for your answer to my last comment post! I have asked this question to a few market analysts but have yet to really get an answer that I am clear on. "why do we seem to fill gaps once created?", just like we did today, and I thought it would have been impossible to go to these heights again?
Hi Eastern, The futures markets determine much of the trend. So gaps at the open are common due to the price discovery accomplished in the overnight futures sessions. The main session starts at 4:30 EDT and is open while Asia and Europe markets trade. Therefore, when the other parts of the world perform their price discovery it gets reflected back to our futures markets. Intra-day gaps are a study unto themselves. Breakaway, continuation, and exhaustion gaps have different psychological effects because the participants and their overall positions prior to the gaps vary amongst the types. If you are in a position and experience a breakaway out of congestion against you it can lead to some crazy behavior, for example.
Thanks for your answer to my last comment post! I have asked this question to a few market analysts but have yet to really get an answer that I am clear on. "why do we seem to fill gaps once created?", just like we did today, and I thought it would have been impossible to go to these heights again?
ReplyDeleteEastern,
ReplyDeletePoint me to the gap and I'll give it a whirl. Gaps are emotional hot spots, but the psychological impact depends on the gap type.
on the 16th of this month per my graph we opened up with a good gap lower. Closed the night before at 109.67 and opened next day at 109.16.
ReplyDeleteToday we went up to fill it. I hope we are done and again pull down hard now.
Hi Eastern,
ReplyDeleteThe futures markets determine much of the trend. So gaps at the open are common due to the price discovery accomplished in the overnight futures sessions. The main session starts at 4:30 EDT and is open while Asia and Europe markets trade. Therefore, when the other parts of the world perform their price discovery it gets reflected back to our futures markets. Intra-day gaps are a study unto themselves. Breakaway, continuation, and exhaustion gaps have different psychological effects because the participants and their overall positions prior to the gaps vary amongst the types. If you are in a position and experience a breakaway out of congestion against you it can lead to some crazy behavior, for example.