that is an amazing cycle!

I think Matt would not mind me posting his reply, so here it is.

I'd say the gap should occur on an open generally however I would generally employ at least a 15 - 20 min gap rule to see how the gap behaves, because if gaps are going to be filled, the action over the first 15 - 20 min is generally telling.   Now the SPY system will sell an oversold bounce, just like the RSI 2 revision to the mean systems, so I'll leave that up to you, but generally even in bad trades those systems get out at better prices than what the bad trades are because of the bounce, however they are unable to get out without a bounce, and this can be a problem because if the market went into a free fall they will not exit.  

I'll let Steve fill in more since honestly, he's the one who came up with the term 'Gap of Recognition', therefore he might have more thoughts on this

thanks

Matt

Matt,

How do you deal w/ a gap of recognition, from a trading standpoint, on the day that it is potentially underway? I want to be smart about a possible gap, as mentioned in the newsletter.  Given that you don't know beforehand whether the gap will fill during the session, I see a few options:

1. Sell immediately at the open and wait to see if gap fills. If it fills, decide whether to re-enter based on the fill itself or wait for a trigger of some kind (what?).
   
   
2. Wait until EOD and sell then if gap remains.  The question of re-entering isn't an issue in that case, but in the meanwhile price may have fallen considerably.
   
   
3. Wait for a bounce and sell in accordance w/ the SPY system sell signal.  I worry about this last option: isn't the point of a gap of recognition that the market will not come back up and fill the gap before heading significantly lower?  And wouldn't the SPY system in that case give a sell signal at a loss, i.e., somewhere well below the gap?

No worries, was just being a little humorous.  More important is the question I am about to pose.

already entered a 5th, now it's time for a 6th.

25/170/25 and 34/170/34 MACD histograms both on sell on the 5 min chart.

something should give here soon....  Looks more like a descending triangle than a symmetrical one.

shocking news.

You really have to be on your toes, and know how set all kinds of special alarms (Matt, you mentioned once how you do it, I never looked into it w/ Trader Work Station) to catch these before they're too far gone.  I never seem to get them ( ), and I've pretty much given up trying, because it's too time consuming scanning all the charts.  Okay, I'm now going to the garden to eat worms!  Seriously, I never have figured out how to catch these high flyers before the fact, or when to jump on board vs. when it's too far gone.  Ultimately I feel like I'm on the outside looking in, and it's very frustrating.

Long GDX, stop at 41.35.  We'll see if gets any legs; if not, not a big deal.

Wow, that was quite a fever (for an adult), glad you're doing better. You'll be easily worn out for a few days, so don't overdo anything or you might relapse! Hope recuperation goes well : ).

Reviewing the video now.  Actually, the price action on the monthly chart and weekly chart both suggest the big swing is going to be to the up side.  Under this scenario, we might get a bit more weakness and then trend higher again.  This would be in agreement with the article (posted here by someone) about June up moves during Democratic Presidents' re-election years.  Bottom line, as usual no way to know which way for sure.

I get a free video from another technical trading site, and one of the two traders had a video showing that a favorite indicator of his, in addition to price action, suggests a 200-point move coming next week or so.  Of course, the indicator doesn't say which way the move will go.  I'm trying to be prepared for either direction.

Well, one is that the system cannot take into account the chart pattern.  It doesn't know we've been going through a topping process, and it doesn't know anything of head and shoulder patterns, or any other pattern for that matter.  Nor does it know about seasonality.

feels like a bear flag!

false break looks like.

Exactly.  If I had to do something, I'd be shorting gold itself.  But it's easier to walk away.

I think we're looking at a fifth entry tomorrow (i.e., prices will be even lower, there's not actually a 5th entry!), if the JPM news is any indication.

Ah, so glad I sold that in April!

Right, that's another very useful one.  I was just looking for that 34/170/34 setting you've lately liked in conjunction w/ the 25/170/25 MACD histogram.  Trying to read the SPX right now, looking for a long or short, short term.  The short term triangle you just posted is the exact thing needed here to use as a trigger, then watch the histograms for confirmation.

btw, I closed my short based on your triangle.