Nasdaq Comp Gaps and Reversals Thread

The Baptist

Established member
715 45
I use daily bars, the extent smaller timescales conform is unknown to me , I would expect some conformity, but more significance to the bigger timeframes.

The gap referred to was that indicated in tradesmarts first chart on this thread.
 

tradesmart

Experienced member
1,286 22
An amazing relief rally yesterday (definitely a relief after the recent choppy action.....!) A full closure of Monday’s gap and a bounce off the 100ema signalling the reversal.

Quite often a 38.2/50% retracement follows these surges, so will be watching for a pullback…… :cool:
 

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tradesmart

Experienced member
1,286 22
Well, the Island Reversal that kicked off the thread last week has proved to be the powerful trend reversal indicator suggested so far, and the Naz has now risen over 100 points north, and is well clear of the 100ema shown in the 10min timeframe.

No hint of retracement yet after Tuesdays big rally which seems bullish in the face of some negative news/data yesterday, and likely a sign that the market is expecting more upside......

Suspect that we might see a pullback before the long holiday weekend on both sides of the pond though....... ;)
 

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tradesmart

Experienced member
1,286 22
As mentioned yesterday, the market was expecting, and got, more upside and yet another opening gap just waiting to be filled and so it was – ND on RSI signalling the top of the move at 1992 resistance and PD signalling the bottom at 1968 support.

Looking for a likely pullback to red today after 5 green days for the Naz and the long weekend ahead.

All of these moves/chart profiles are mirrored virtually identically on the tradeable NDX (Nasdaq 100 index) and QQQ (Nasdaq 100 index tracking stock) charts attached – spot the difference – not much..!…… :cool:
 

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Trade_Ideas

Junior member
26 0
The Gap

Salty Gibbon said:
If a stock gaps up U$ 4 or 5 after a piece of good news and then stays strong for several days after that, would you say that the gap is likely to be filled if the piece of news that caused the gap has now resulted in a truer valuation of the Company's stock price ?

TradeSmart: Great charts and explanation
Salty: The discussion here focuses on gaps almost always being filled. While that occurs often there are other patterns that a good number of traders I know look for called false gap retracements.

http://www.trade-ideas.com/Help.html#FGUR
 

tradesmart

Experienced member
1,286 22
So much for thoughts of a pullback on Friday……!?

6 consecutive green days for the Naz, but the low volume rising wedge chart pattern on ND RSI signals that things are weakening, so clearly some downside potential for today…

Some interesting details of reversals and alerts from Trade_Ideas..
 

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Trade_Ideas

Junior member
26 0
The Patterns are full

tradesmart said:
So much for thoughts of a pullback on Friday……!?

6 consecutive green days for the Naz, but the low volume rising wedge chart pattern on ND RSI signals that things are weakening, so clearly some downside potential for today…

Some interesting details of reversals and alerts from Trade_Ideas..

Here is a scan of stocks currently in the 'False Gap Retracement' pattern - available anytime:
http://www.trade-ideas.com/SingleAlertType/FGUR/False_gap_up_retracement.html

http://www.trade-ideas.com/SingleAlertType/FGDR/False_gap_down_retracement.html
 

tradesmart

Experienced member
1,286 22
Well, the rising wedge triangle mentioned yesterday did signal downside with an ND RSI top at 1991 ish resistance showing the way down, but only as far as a clear intraday ‘W’ bottom at 1973 with PD RSI confirming support; sparking a late rally right back to resistance and a 7th consecutive win for the Naz……!

Looks ready for a pullback to me with ND quite pronounced on the 10min chart, but if resistance at around 1991 gets taken out, a test of channel resistance at 2010 ish could be on the cards shortly imho…......
 

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tradesmart

Experienced member
1,286 22
The first ‘red’ day in 8 for the Naz, but only just, closing a mere –1.79 points down….

Return trip intraday action, opening with minor gap up to a ND top on RSI signalling a pullback off resistance at 1997, falling to find support at 1978 ish confirmed by a short duration double-bottom on the price and RSI just below the 100ema, causing a reversal and a surge to prior resistance…..(slightly aided by a falling oil price…… ;) )

Could be a volatile, news dominated, couple of sessions ahead with OPEC today, and NF payrolls tomorrow ……….
 

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tradesmart

Experienced member
1,286 22
A gap down at the open falling through the 100ema set a very negative tone for the day and the Naz never looked back…..

No gap fill, the one surge north merely bouncing off the 100ema, and an attempt to find support at 1967 ish with a hint of PD on RSI, failing miserably to end the day at the low………

Almost predictably, no buyers about ahead of the infamous NF Payrolls data today at 13.30 BST, and sellers ruling the roost…..

Bound to be a highly volatile, data driven session ahead, with the possibility of gap fill (or not… :confused: )
 

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tradesmart

Experienced member
1,286 22
A big ‘pop’ opening on Friday creating a huge 20+ point gap, but filling Thursdays gap down……a rise to the 1995-98 much tested resistance zone, and ND on RSI signalling downside and a return trip to the close….

Futs today assuring another ‘pop’ opening, but the lower gap unfilled from Friday could well act like a magnet…......
 

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tradesmart

Experienced member
1,286 22
Well, we got yet another ‘pop’ opening followed by a bullish performance with no hint of any magnetic pull from the two gaps below, but the Naz will almost undoubtedly retrace to address these soon……

Top line channel line resistance has been reached at prior S/R level 2020 ish (60min chart) so maybe we can anticipate some consolidation/pullback before new direction is assumed….

I’ll quit daily postings on the thread now that maybe a short term ‘top’ has been reached (?) and full confirmation of the power of the ‘island reversal’ setup that kicked off the topic in mid-May; it wasn’t intended as a long term study - in future I’ll just post any ‘major’ setups that I notice.

If you are trading the Dow/S&P, it’s well worth keeping an eye on the Naz, as it often shows clear reversal signs first ie:- the Naz had decisively reversed off its 2150ish high at the end of January 04 and it was mid February before the Dow/S&P followed suit – the Naz had headed north from its island reversal on 18th May; the Dow/S&P didn’t move until 25th May….
 

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tradesmart

Experienced member
1,286 22
Since the last post over 2 weeks ago, the Naz has retained it’s bullish profile, with a minimal 38.2% fib pullback signalled by the ND RSI at the 2020 ish high, and forming a bull flag just under the resistance of the top trendline.

As of yesterday, we have a breakout north which is now approaching prior resistance in the 2032 area….

Very pronounce ND RSI on the 10min chart leaves little doubt that a pullback from resistance is likely soon……..
 

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tradesmart

Experienced member
1,286 22
A nice gap up at the open today, and the almost inevitable ‘gap fill’ happening before our eyes now…….

Pulling the Dow and S&P down with it…….

ND on RSI confirming the outcome....
 

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tradesmart

Experienced member
1,286 22
The Naz has now confirmed a well defined reducing uptrend channel since the May low at 1860 ish and the island reversal sighting which kicked off the thread…..

RSI divergence, both positive and negative have given a reliable indication of the short term index direction…

Will be watching for a break of the channel boundary trendlines to give an indication of future direction, but not automatically assuming a bearish outcome despite yesterday’s sharp decline…….

(But the bears must be feeling hopeful as the index tests the lower line…… :confused: ......)
 

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