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#11 da_cheif

da_cheif

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Posted 21 September 2018 - 09:50 AM

 

 

I hate to go all Admiral Ackbar, but 



 

ye of so little faith......its a once in a life time move with plenty of promised nose bleeds and fear of heights

 

however just as the market just corrected -1.7% after a new high and then moved up to another new high since this site is called "traders talk" its not reasonable and should be respected for the people who actually will "trade" the market as it moves to new highs.    

 

trader site.....there are day traders and position traders     both are traders.....imo day trading can be dangerous to you financial health....most day traders are broke...imo....maybe thats why this site is becoming depopulated



#12 ...

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Posted 22 September 2018 - 01:55 AM

[Have you noticed that] recently when this market breaks out, it does it on a gap up?

 

Yes, it often does. On any chart using only US market hours.

 

Now glance at a daily chart of the S&P that incorporates 24-hour world-wide trading. For instance: https://www.finviz.c....ashx?t=ES&p=d1

 

No gaps at all. None in the last year. Couple of "inside" gaps between close and the next high or low, none bar-to-bar.

 

Gap "theory," such as it is, may have had some validity back in the days when US stocks and futures only traded during US hours on US markets, but those days ended about 40 years ago. I first read about gap "theory" in about 1966.

 

There are tens of thousands of gaps in US-only stock and futures charts that have never been filled. Even though they only trade in the US. With all of its "gap" theory adherents.

 

There are hundreds of thousands of gaps in US-traded non-US stock and futures charts that have never been filled. A daily occurrence. It's just the nature of any non-world-wide beast because we only capture about 6 hours of a 24-hour market.

 

As for phantom US-only chart "gaps," there's reason to think that most of these phantom US "gaps" would be "filled" just by normal fluctuation that would occur in the absence of any phantom "gap" on a US-only chart. That calls into question any gap "theory." No theory is validated by that which would have happened regardless.

 

Is there any reason to pay attention to US-only gaps? Maybe. Because a few may try to trade it. But, that someone in the US didn't see some stock or future trade at some range of prices means nothing if the rest of the world DID see that happen in the middle of the (US) night. Or, if nothing else, see it on their charts. Either way, the rest of the world ain't buying the reality of any phantom US "gap."

 

Lastly, recall that in the good old days, stocks traded mostly in eights or quarters. Or even halves or more for high-priced stuff. Every single price change left a "gap" of 12.5 or 25 cents or 50 cents or more. (I'm ignoring the 16ths or 32nds for the cheap stuff.)

 

Even with penny increments for all stocks, every trade leaves a penny "gap" (ignoring .00XX trades.) Every trade creates some "gap."

 

Some gaps are more equal than others -- until everyone figures out that none of it matters at all.

 

Nature may abhor a vacuum (the concept underlying gap "theory,") but many (or perhaps most) "gaps" exist only because a (US-only) chart is being used.

 

Others are because of larger forces like massive earnings or economic surprises, positive or negative, and those massive forces aren't going to be altered by any nonsensical "gap" theory.