Quick video:

http://breakpointtrades.com/jing/2010-07-22_0842.swf

Also you can imploy a simple 15 min rule, I've posted this on the blog many times, here's a link to an old post

http://breakpointtrades.com/blog/post/55369/

the blog search works well, use it guys!

and again, in this fast changing dynamic market; realize that things can change on a dime, and the gap rule does not tell you what the rest of the day will do, maybe the first hr or so only

Remember today, Bernanke speaks as well

follow the 15 min gap rule and I'll post the gap indicators that I use, which is the gapless PSAR etc.  

Market gap up but the market is at resistance and so not surprisingly that gap up was sold and filled.  

Also when the market gaps, I like to use the Gapless PSAR as a guild, generally when the market gaps up if it is below that gapless PSAR, the gap is sold, and when the market gaps down but is above the gapless PSAR, the gap is bought.  That Psar is in the Store

Of course you can also follow a 15 min gap rule, do a blog search for details on that.

And of course, when the market gaps you need to be aware of what condition the market is in, i.e. is it overbought over oversold, is it at resistance or support.  Remember, the market is at major resistance i.e. the downtrend line on the daily charts, so not surprising that the gap up fills.

Otherwise let's see what happens the rest of the day.  The market could either sell off or just pullback and recover again, we'll see

Looking at a crazy 45 point gap up this morning on SPX futures, and 350 on Dow futures.  I'll be watching my gap indicator this morning to see if it says anything. 

Also remember the 15 min gap rule, just do a blog search with that key word to pull up past commentary about it

It's a little iffy this morning and can switch on a dime, it's going back positive now.

But otherwise on your own employ the 15 min gap rule,do a search on the blog, you'll find an explanation.  You can search by more than one key words at one time, such as 'gap rule' or '15 min gap rule'

It's not positive, but don't be the farm on it, it could change around too.

also remember to employ a 15 min gap rule on your own (do a blog search). 

so far it's positive and says gap will hold. 

Also remember the 15 min gap rule:

Draw 2 horizontal lines; one at the lows and one at the highs of the first 15 - 20 min. If the market can stay above the 15 min high candle bar, the it is considered positive and the gap could possibly hold up for the day , however if the market falls below the 15 min low, then the likelihood of the gap fading increases greatly.  Realize that this is just a technique only and doesn't work all the time!

dylan398 - no it didn't  I don't count stocks that trigger on the opening gap as triggered.  It gapped down yesterday on the opening bar and then rallied, you want to give 10 min or so.  Even if you shorted it, you would have exited it when it went back up, or at least I hope you didn't stay short all day yesterday.  Overall it will probably work out though, but those MA's are KEY above.

watchlist rules - becareful of the first 10 - 15 min

http://www.breakpointtrades.net/membersonly/Watchlist/home.html

on gold stocks be on the lookout for a gap up and reversal today, it's possible since gold stocks have been up so much and these short term trends sometimes end with gap ups.

It's hard to say at this point, follow the 15 min gap rule to see if GDX stays above it's 15 min high or not (do a search on the blog for 15 min gap rule) see how GDX holds up in the morning

my gap indicator reversed after a few minutes and said to buy the gap.  However since you guys can't see it, I would rather not post it.  Remember to follow the 15 min gap rule, do a search on the blog, the 15 min gap rule, which anyone can employ here (it's very simple) said to buy the gap

Remember to employ a 15 - 20 min gap rulei.e. see how the market holds up the 1st 15 - 20 min i.e.

Draw 2 horizontal lines; one at the lows and one at the highs of the first 15 - 20 min. If the market can stay above the 15 min high candle bar, the it is considered positive and the gap could possibly hold up for the day , however if the market falls below the 15 min low, then the likelihood of the gap fading increases greatly.  Realize that this is just a technique only and doesn't work all the time!

it said not to buy the gap, but again use the 15 min gap rule as well

do a search on the blog for the 15 min gap rule.  Also I have two custom gapless MA's and a gapless Parabolic sar (that are not affected by gaps), so when the market gaps up, as long as the price is above the PSAR and the gapless MA's, you buy the gap.  however those are proprietaryindicators.  The gap system doesn't tell you about the whole day, just what to do in the morning.  use the 15 min gap rule below

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it said not to buy the gap down, but remember it's not infalible and only for the morning.  Also remember to review the 15 min gap rule, you don't need special indicators for that one.

Unfortunately these days, gaps are the rule instead of the exception; it seems like now the market gaps 8 days out of 10 instead of the other way around, which is just another reason that we are in a bear maket.  In Bear markets you have lots of gap days because emotion and news is even more of a factor than normal.  However Bull markets don't gap all the time like this and are opposite.

it said to buy the gap down, remember I'm going to be at the computer much, also that gap indicator only tells you about the morning not the rest of the day.  Also look up the 15 min gap rule on the blog, I think that came into play as well

Remember to employ a 15 - 20 min gap rule i.e. see how the market holds up the 1st 15 - 20 min i.e.

Draw 2 lines; one at the lows and one at the highs of the 1st 15 - 20 min. If the market can stay above the 15 min high candle bar, the it is considered positive and the gap could possibly hold up for the day , however if the market falls below the 15 min low, then the likelihood of the gap fading increases greatly.  Realize that this is just a technique only and doesn't work all the time!

here's an example, the 7/21 EMA crossover is not part of the gap rule

I added more picks to the Watch List.  One note...please be very cautious about Long long on a big gap up!!  Many times gaps fade, therefore it's a good idea to see to employ a gap rule and see how the gap acts during the 1st 15 min.

One way to do this is on a 5 min chart, draw two horizontal lines; one at the high point of the 1st three candles, and one at the low point of the 1st three candles; a break of the high after the 1st 15 min is generally positive, while a break of the low after the 1st 15 min is negative and the gap often fills, or at least partially. In any case, one must put in a STOP just in case the market were to reverse course.

If the Gap Up Fades, EEV(ultra short emerging markets would be one way to play a gap fade for aggressive traders)

Remember to employ a 15 - 20 min gap rule i.e. see how the market holds up the 1st 15 - 20 min i.e.

Draw 2 lines; one at the lows and one at the highs of the 1st 15 - 20 min. If the market can stay above the 15 min high candle bar, the it is considered posititve and the gap could possibly hold up for the day , however if the market falls below the 15 min low, then the likelihood of the gap fading increases greatly.  Realize tht this is just a technique only doesn't work all the time!