Wednesday, August 19, 2009

GAP Down

Interesting to see a GAP down of this size and reverse right away. As mentioned in the past usually a GAP of this size ends up setting the high of the day within the first 15 around the open price. This did not occur today so it makes trading this quite a bit more difficult. Based on the strength here its very probable the low for the day has been made at the open and we continue higher as a stepping day (quite odd but has to be considered).

Other scenario is a GAP fill and then close between open and previous close but remain in a tighter range. If we fill the GAP and see any green today expect more follow through and at least 995-998 range test today.

As you can see - too many scenarios to take any trade, however, we have enough clues now to figure out how to position ourselves and how we want to play this. Any moves higher is a nice chance for me to add more puts =)


  1. cannot believe it actually happened. It was one of those "should not happen" type of scenarios. High thus far is 995.52.

    I added more puts here but do expect higher prices into the remainder of the week.

  2. theoratically this should be it for the day. HOD now at 998.40.

    First we stopped at the 995 as mentioned, then again at 998. Expect a close around the 993.50-994.75 range.

    There is one more chance for another push up which will invalidate LOTS of bear cases (but something that I had expected) which is the 1004-1008 range. This should not happen today but is possible as a follow through.

    Lets see what happens the rest of the day here. Will be leaving home shortly to go to the airport.