ETF SWING & DAY TRADING

[Little Chico]

Resistance Captured...

...what ou are referring to is commonly called a "gap up" that has taken out the expected resistance levels. Some expect that a gap (up or down) will have to be filled which means a closing, sometime soon, at or near Thursday's close, of 41.73 or therabouts.

I was expecting, on Friday, for resistance to hold and the price action to recede, but it didn't. How to trade a gap up is
difficult. Should I cover my shorts, absorb the loss, and take a new long position? If so, that just demonstrates my point, that when a new trend begins, or if we have a gap up that takes out the old resistance level, by capturing it, we have a new scenario.

It's not clear that Friday's price action is a new trend, or just a gap up due to the reaction to the jobs report, since it was on low volume. If it was just a gap up, the gap will likely be closed with a sell off day that will take us below (what you are describing as) the newely established support level, to return to Thursday's closing...41.73.

Chico