Correct. Generally speaking, wide gaps are considered to be professional gaps and we trade in the direction of the gap, unless the instrument is extremely overbought/sold. Small gaps are usually filled. The gap traders position themselves to fill the gap. Once the gap is filled, they close the position.
8 comments:
Jamie, I think its more of an attempt to fill the gap at 519.19 from Monday.
Good eye Chin,
I thought it was filled, but it didn't fill completely.
OPEX tomorrow, so I guess everything has slowed down due to pinning as well.
What does this mean ? the island reversal is not there any more ?
Why is a gap fill so important ?
Correct. Generally speaking, wide gaps are considered to be professional gaps and we trade in the direction of the gap, unless the instrument is extremely overbought/sold. Small gaps are usually filled. The gap traders position themselves to fill the gap. Once the gap is filled, they close the position.
seems like this is what happened just now. Option max pain will be there around 530, I feel. Huge # of calls there.
Good morning Jamie,
a wild day today.. what happens if AAPL retests the lows ?
Chin,
Very wild. AAPL currently testing the original setup. If this fails, the target for the shorts is $488.50.
I not inclined to re-enter when it becomes obvious that the bears are still in control.
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