Monday, January 3, 2011

Very Large Gap-Up Open Above Prior Day High

Implies an Imbalance Market Condition

Large Gap-Up Open above Prior Day High, and Staying Above the Open implies an imbalance opening and imbalance market condition offering a high probability large-range up-trending morning with a morning range of between 25 to 35 points on the NQ before the start of lunch consolidation.

If followed by a small lunch consolidation pattern, usually in the form of an abc-wave pattern of less .382 of the morning range, I would then be looking for the market to close at or near the day high, implying a trending-up, one way trend day.