Mind the gaps

Mid-week market update: In the short run, how the market reacts after price gaps can be important clues to market psychology and direction. How quickly the market fills a gap is a measure of either strength or weakness.

 

As accompanying hourly chart of the S&P 500 shows, we have price gaps everywhere (upside gaps in grey, downside gap in pink). In particular, the price gap in reaction to the NVIDIA earnings report sticks out the most.

Here is how I interpret the gaps.

The full post can be found here.