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Something I found interesting so I thought I would post it here. This is from lowtrade and the "lowtrade board".
GAPS !
Why do gaps need to be filled?
Here's my take, Gaps don't need to fill, they normally do!
You have to think about what causes the gaps in price!
Emotion ! That's why you often see the term emotion gap, in books. When some news event or big guy manipulation happens, the price swings to extreme, leaving gaps in the candle pattern from the previous day close, to the next mornings open.
There are 4 types of gaps,
Common Gaps
Breakaway Gaps
Runaway Gaps
Exhaustion Gaps
Keep one thing in mind! I want to stress, my opinion on what a gap pattern looks like.
A gap is seen when the day before's close price, is lower then the next mornings open price! (the candle body only) If you look at your trade screen, & list the previous days close & new days open, you'll note PREV&OPEN PPs, they are the numbers!
Many look at the candle chart and see the candle spikes lines touching the day before's EOD PPS or the day before's candle, has a top tail, reaching the next mornings open PPs.
Because the tales seem to cover the gap, many say there is not a gap! WRONG!!! The spike tail, could have happened any time during the day. And the candle body is the actual final or first Price in each days trading. Only use candle body.
Daily SPIKE TAILS don't count!
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I say 90% of all gaps fill, others may say 80% or 75% or 98%. I have no way to prove this, and double anyone can! Just let it be a concessions, that gaps fill most all the time! So they are reasonably low risk trades.
Now back to the 4 types;
Common are always closed.
They occur with a one day pop, usually, and the lack of a second day continuation, shows why they fill! There is NO real emotion.
Breakaway are usually closed, You see them in a multiday emotion run, where the stock price is fluxing around the same level over several months. They normally occur during chart pattern moves. (like triangles, double bottoms & the like) And the following retail mindset returns to logic, and fills the gap with the retrace.
Runaway are often the "few" that don't fill. Or if they do, it takes so long for them to fill, you don't look back that far to see the gap fill at all! LOL The difference with these and Breakaway gaps are, these are seen in climbing stock patterns, not fluxing. Retail is continuously positive or negative in a climb or walkdown. And a one day emotion spike doesn't warrant a price correction, because the mindset would get the PPs there anyway! Basically every thing just continues!
Exhaustion Gaps are rarely seen. They happen at the end of a move. And show the retail mindset has reached a enough is enough point.
Worriers have been expecting a turn too long, they have a concerned, trigger finger, sell placed. The next day others, which weren't worried, see this and can't decide to agree or not. The PPs swings large. Then everyone just gives up. and the gap is filled, with the change in mindset.
Normally you see a gap with the second day spread (swing) that runs higher & lower then the gap days candle. (a engulfing candle pattern, is the signal of an exhaustion gap) Hard to find, buy reliable to play. They always fill, but can be evaluated incorrectly, often. You should know what your doing to play these, but they are normally successful trades, if you call them correctly.
So, to recap;
MOST all gaps fill. They are caused by retail emotion and when emotion leaves, the long share holders, bring the stock price back to a reasonable, average new price level. 50% on a FIBs indication.
If you see a gap; expect the price to come back & correct the emotion!
Common, Breakaway, & Exhaustion gaps
Are the ones that fill most of the time.
Runaway gaps rarely fill, over a short period of time and should not be played.
Good luck. ;)
Thanx much lowtrade. I printed out your "gap" post and will read a couple of times. The summary really helped the most but multiple reads will help deepin my understanding.
TY
New guy here. Seems like I can hardly keep up with other boards but this looks like a good board to follow.
My first question is "gaps". And why they should be filled.
Sorry if this has already been addressed here. If so, please direct me to the post ;)
TIA
jc, you said the first lady you talked to at the minerals office said there are many companies at work there. Are these companies affiliated with NVMG?
Maybe I missed something buy doesn't NVMG have the rights to the res? Or is NVMG the only one bonded by the DOI but others may still produce on the res also.
TIA
Great post Med, thanx.
Holding does seem to be one of the major parts to the equation. Thanx for encouraging that lowman.
Hope the girls are giving you time to relax a little bit ;)
Have a great time.
punk
I went to Pendleton , Or. this last fall for a big tourney. Hundreds of people and I finished in the money 4 times. It was fun and I would like to go again, maybe the spring poker roundup.
You and me both wt!
Later DF, good luck at the casino. I'm looking forward to my next big poker tourney myself.
Evening to all.
Sorry vz, it was for DF but to all too. I calm board seems more productive in my experience. But what do I know. I'm only a punk.
;) GLTA
Yes, vz, I do believe it was NVMG that lowman had this event happen. I'm into NVMG with 2 million shares and the past seems to be the past. I'm looking forward to more PRs and oil prices holding strong. I plan on making money on all my O&G plays including ALRY.
I like domestic plays and also like spending my money in country. Always have, just my philosyphy. I think ALRY has goods to offer and will be just fine.
I'm new to this game relatively speaking and I've already been through a handful of these kind of one-day-scares and they never seem to stick for long when the company has good prospects.
GLTA and thanx for the response DF. Hang in there Dude. Lowman had the same thing happen to him a while back so I was told. He thought fundys had changed on a certain co. and he pulled some or all of his shares as his first responsibility is to himself. Some followers whined when this happened and shortly after lowman changed his mind and bought right back in.
I've come to realize early on that mods are just people too and anyone who pins all their decisions on what a mod does will get just what they deserve! "Their own choice and results."
Just keep talking straight DF and everything else will level out in time. Good job!
TIA
Yo DF, is it possible for CLYP to show up just to flash & shake without there being any real risk of dilution? Seems to me I've heard that MMs sometimes work together to help their own cause and looks can be deceiving.
Could you comment as to whether this can happen or maybe just not likely.
Seems to me that ALRY has some good fundys and should carry strenghth just by being a decent company involved in domestic oil. This is just my opinion.
TIA
P.S. Does anyone have a current share structure handy?
You can put me down for 2 hats. TIA
Was that your .06 this morning? TIA
My whole order went through at .06 Patience paid off. Would someone please cast-off the lines and lets get this cruise under way. ;)
Mornin' all.
I was told that a .03 to .06 spread is normal for a stock at this level/value. Right now the spread is .04 on Scottrade.
I'll take one of them thar hats lowman. ;)
A friend of mine took his seed $ off the table the other day and when Hemi dipped he could'nt resist and he put the seed $ back in. lol
Canyons could be an excellent place for this design. Wow. Maybe I should start a new business installing vertical wind mills for canyon residence. lol
Is it the higher mounted wind-wheels that see more wind regularly when they are stacked? If so, maybe they could develope a big goal post, without the top-wicks and line up all the wind-wheels at the top (optimum) rung ?
Too late, God already did it. (slow the wind down that is, and he did it for free ;)
It's called the continental divide just east of Butte, Mt. and (by the way, Butte holds some record low temps for the nation, or at least use to.) it doesn't get to windy on the west slope where I live.
Nice chart starboy. Those MAs seem to be shaping up nicely ;)
Nice post Argyll. And the farther east you get in Montana the windier it gets. There are many wind-generators near Livingston, Mt. and they have been there for years. I've never been to the Fort Peck Res., but if I know Eastern Montana like I know Eastern Montana, and any other plains/rolling hills state there is wind-o-plenty.
Yeah, I saw that, but also think these domestic O&G are great right now. This news is always present in recent times and it seems to me that the mentallity here would be to tap more of our own black-gold.
Things just seem to be stacking up in favor of these O&G plays.
Come and listen to my story 'bout a man named Jed..... Hope I can find some dry powder soon. GLTA
I'm with you penny, I'm holding long and would also hope the loan PR happens sooner than later. But I'm long either way. GLTY
No kidding. Let's face it, society needs oil like it needs oxygen. We benefit not only from geopolitical tension, (not that I want tension), but there has alway been a cry for more energy independence as well. Are we possibly going to experience a market bubble in our favor here???
Maybe I'm off-base, but domestic oil plays sure seems like a sweet spot right now. You know, kinda like that bar stool lowman is perched on right now next to a beautiful blonde. She's probably trying to pump lowman for MY ph# as we speak. LMAO
Sorry low,
GLTY ;)
LMAO Good one zguy. Actually, it does feel rather cozy here with HMGP, NVMG, CTUM while watching the market-herd sell off a little. I think if I were into more mainstream stocks I would probably sell and sit on the sideline and have a beer and watch the show but I like where we are now.
Do you guys think the market exit today could maybe even help these o&g plays? People looking for a place to put there money and they look to plays like ALRY, HMGP, NVMG.
Seems like some of that would happen possibly. Anybody feel the same?
TIA
Looks like oil & gas are the place to be right now wouldn't you say chartinator?
TIA
That's where my mind went too kelseyf. Take the spikes out and what's the big deal. Everything looks fine here and with NVMG.
I also think O&G is the place to be for a good while.
What a great learning op. this was for me. I hung my hat on the fundamentals a long time ago and when the pps dropped this morning I knew something was wierd and I didn't even get that nervous little tickle of fear. I just knew it didn't make sense. Not in the big picture. Boy, is that big block going to regret, unless it WAS an emergency or something. Guess one never knows about life.
Thanx to all those who update fundamentals/PRs as well as occasionally repeating old PRs. This makes it easy to go long with Hemi.
GLTA
Wish I had some dry powder. That IS strange that NITE is so far from the other MMs.
Can the MM make up lost ground here if he has been shorting? And can that actually bring about more stability, with the MM off our backs if they can play a little catch up with these moves. (hope this question makes some sense)lol
TIA
I agree, and, building a load of freebies in many stocks I think is one way to go. If just 2 or 3 take off it could be life changing. That's my goal and am just starting. Still haven't taken seed but maybe getting close. I'm in 10-bagger land on both HMGP and NVMG. (not quite a 10-bagger on NVMG actually, but could be today.)
Could be adding ALRY one of these days.
GLTY kelseyf
Thanx hardasset, I'll give Bill a listen one of these days.
I think pulling out seed $ and moving on is a great plan that can keep a guy in the game. The biggest thing to success in anything is to be able to stay in the game.
I am still relatively new here and have found much useful, common sense that can make you money and save your principle.
Remember Warren Buffet's 2 rules.
rule #1: preserve your principle
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rule #2: don't forget rule number one
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GLTA
I'm into Hemi @ .05 and still haven't taken seed money out yet. Wouldn't made finding similar success with ALRY if possible.
I've been a northern tier guy all my life. The cold doesn't bother me to much but nice sunny weather is alway my first choice. lol
GLTY