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Fishing For Clues

Posted on October 13, 2008

So what of this upside pre-open gap today, in the midst of a downtrend? This, from Rob at Quantifiable Edges.Buying gaps up of 0.75% or more during downtrends was actually profitable. In this case, 58% of the 105 instances finished with the SPY closing higher than it opened.......I suspect short-covering is a big reason that large gaps tend to spark additional buying in downtrends but not in uptrends. Stops get blown through overnight and when they see the market getting away from them, panic-covering ensues.Regardless of the reason it appears when the market is below its 200ma the easy money ...

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markets , trading , vix , volatility