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1st attempt to send this seems to have have got lost in the twilight
zone....
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> From: Philip Nixon <xfs68@xxxxxxxxxxxxxx>
> To: ivo1@xxxxxxxxx; RealTraders Discussion Group
<realtraders@xxxxxxxxxxxxxx>
> Subject: Re: opening
> Date: 13 April 1998 17:23
>
> Try this :
>
> Say the market gaps up. I always assume that the opening level is trying
> to tell me something as it is a function of order flow/sentiment so I
will
> start with the basic assumption that the market wants to have an up day.
> Many times the market will try to fill the gap usually via the activity
of
> the locals so I will watch them do this. There are then two trading
> possibilities. Firstly the market will trade down through the previous
> high which is an important level. If it does this I will either go short
> on a stop left say 3/5 ticks below the prev high or I will watch it trade
> through and then sell the first pullback. I will put a SAR at the days
> high. Second possibility is market fills gap and trades back up through
> days high so far and I will go long on a stop left just above days high
so
> far or buy first pullback. I will put a SAR at the days low. The basic
> point here I feel is not to stick rigidly to the idea that a gap means
one
> thing or another. Let the price tell you what is going on and go with
it.
> I love trading gap days because they point to a heightened level of
> activity where the best trades are usually found. Look at todays S&P as
a
> prime example.
>
> regards
>
> Philip
> ----------
> > From: Peter Iovanella <ivo1@xxxxxxxxx>
> > To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> > Subject: Re: opening
> > Date: 13 April 1998 16:51
> >
> > -----Original Message-----
> > From: wes blake <amerskin@xxxxxxxxxxxxxx>
> > To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> > Date: Monday, April 13, 1998 10:53 AM
> > Subject: opening
> >
> >
> > >Howdy,
> > >
> > >I was interested to see if anyone has ever noticed when a contract
gaps
> > >down or gaps up. It seems that a high percentage of times when it gaps
> > >down it goes the other way and when she gaps up she goes the other
way.
> > >Is this maybe the losers getting in in the morning and the pros
> > >finishing up the day.
> > >
> > >Is there maybe something to this.
> > >
> > >Shooting,
> > >
> > >Wes
> > >
> >
> > The "TD TJ" indicator described in the Feb. 98 issue of Futures
Magazine
> > ("Playing with the Kids," p. 34-36) is based on exactly this premise,
so
> not
> > only are you not alone in your observation, you are in the
distinguished
> > company of acclaimed technical analyst Mr. Thomas DeMark.
> >
> > The problem with this indicator, I've found, is on the days that it has
> been
> > wrong -- at least recently, since I have no other experience with the
> > indicator to go on -- it has been quite expensively wrong. Check the
> energy
> > (especially CLK8, HUK8, HOK8 on 3/18 and 3/26) and grain futures (CK8
on
> > 3/30). In each of these markets, on these days, the market did
> _initially_
> > move slightly in the opposite direction of the gap, but unless you were
> in
> > the pit, there was pretty much no way you could have taken advantage of
> > these moves; even if you could have, the size of the move was
negligible
> > compared to the move in the opposite direction (i.e. the original
> direction
> > of the gap).
> >
> > It has been reliable during the current up-trend in the S&P, but before
> the
> > trend 'officially' began with the gap higher on Feb. 2 (basis June),
the
> > signal was erratic at best in this market. This same erratic behavior
> has
> > been exhibited in the metals markets as well, and while the indicator
in
> > those markets has called some very big moves, it has been fair to
> middling
> > at best when it comes to correctly picking the actual _direction_ of
that
> > move.
> >
> > If anyone else has worked with this idea, the TD TJ indicator or some
> > variation on it, and has some filter they use to keep from entering
> trades
> > on days when the market just keeps going in the direction of the gap --
> or
> > if you've got anything else to say on this
> > gap-one-way-then-move-in-the-opposite-direction phenomenon -- I'd like
to
> > hear about it.
> >
> > BJ
> >
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