Today I Noticed and confirmed that over the past 3 months when price gaps more that 2 points but less than 5 points we tend to get an early reversal and strong TREND that Seals the days Gap. The sweet spot that occurred most often was on the 3 point Gap day such as Today. More often than not the Reversal is a classic double bottom, Approaching on High Volume at support @ around 6:45 -7:00 bar then retesting the same area on low volume. This is a VSA signal testing supply on the 2nd test of support, I also noted that at the 9:15 bar usually started the consolidated into a flag and was likely just prior to the continuation of the trend. If you can determine the motive of the 9:15 bar you have a great chance of nailing the trend for the remainder of the day.
15 minute chart show today's Gap Seal after 3 point Gap early double bottom @ 6:45- 7:00 bar then Strong trend for the remainder of the day.
April 15 Gap Seal after 3.25 Gap
What to Look for:
Gaps that are more than 2 but less than 5 (3 is the Sweet Spot) = Strong Trend potential to Seal the Gap AFTER reversing and finding support/resistance level for the day.
Gaps that where less than 2 = usually fell into the CONTINUATION of previous day as defined by the small gap or NO Gap rules.
Also Gaps that were larger than 5 = usually fell into the Large Gap Rules trading in a tight range in one direction or simply stayed Range bound horizontally for the day. see Large Gap clues on Aftermarket Gaps and the 15 Minute chart.
