«They have terrible odds in downtrends.»
Welcome back from the holiday weekend. If you were expecting something different from the market after the three-day weekend, then prepare to be disappointed. Stocks opened higher on Monday, but the gains immediately melted, flipping the Indexes from green to red.
This is normal.
Up gaps are always suspect in bear markets. In other words, they have a high failure rate. Downtrends create loads of overhead supply and legions of bag holders that are only too happy to unload their wares into strength. With that as the backdrop, it’s all the more difficult for rallies to stick – especially when they originate from an overnight gap.
So what do you do? Be careful entering bullish trades in the first 30 minutes if the market gapped higher. This lets the market strength prove itself while preventing you from entering at what could end up being the high of the session.
Video Of The Day: Gino’s Gems – What is Bullish Percent Index? #tradinghacks
In today’s Gino’s Gems, Coach Gino Poore explains what is Bullish Percent Index.
Chart of the Day: S&P 500 ($SPY)
Friday and this morning’s up gaps were aggressively sold.
Today’s line up
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