Trending Gap: Tuesday's Recap

Tuesday's gap-up opening above Monday's high is called by many names. . Elliott Wave traders called it wave 3 gap. Technical traders called it breakaway or run-away gap. Market Profile called this type of opening the Open-Drive Day.

Regardless of what it is called, this type of opening will cause a one directional trending market, in the direction of the gap, that is the market will trend in one direction all day long, with shallow lunch retracement and shallow end of day profit-taking counter-move.

This type of open causes a fast trending move in the direction of the gap as it cleanse stop-losses of traders caught on the wrong side of the gap. It is akin to a race horse as the gate opens and the race starts.