Market Analysis

Mission: Gap Fills

$SPX dropped over 5% since last week’s highs in what seemed like a straight line down, down 6 days in a row with any rally attempt sold into. A vicious decline that blew through levels, patterns, support lines without barely a pause.

The sky was falling. Or was it? Actually, if you view the action through another, perhaps simpler lens, markets concluded some unfinished business: The filling of gaps.

4 specific ones actually: 2 on $SPX and 2 on $VIX. The ones left behind by the even steeper rally off of the October lows.

Indeed today’s intraday low on $SPX coincided precisely with the filling of the final $VIX gap:

Gaps matter. Not all gaps fill, sometimes they take months or even years to fill. But a cluster of gaps in short order have a way of seeing most of them filled.

And so perhaps that’s a message to be pondered as one looks at the latest $NDX chart here:

That’s a lot of unfilled gaps. Just saying.


For the latest public analysis please visit NorthmanTrader. To subscribe to our market products please visit Services.

All content is provided as information only and should not be taken as investment or trading advice. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise. For further details please refer to the disclaimer.

Authored by: Sven Henrich

Advertisements

Categories: Market Analysis

Tagged as:

5 replies »

Comment:

This site uses Akismet to reduce spam. Learn how your comment data is processed.