Once the market opens each day, it can be rather difficult to surmise which direction it will go by the end of the day. For some it seems like a a random walk in the park. But for me, as a trader, there have been countless observations that I’ve made from over the years about what is seen in the early morning action and what it means for the rest of the day.
I’m going to be doing a 5-part series on understanding the early morning action and how you should be positioning yourself for trading the rest of the day. Today, I’m going to start off by talking about gap-downs.
As I lay out the 5 different scenarios (no way is the market limited to just these 5, but they tend to be the most common ones), I’m not saying that every time you see something play out early on, as I’ve noted, that in the end the result will be exactly as I say. Instead, you should look at in a way that says “the conditions are favorable that….”
So let’s examine today’s market condition example and what you can expect from it.
Heavy Market Gap Downs:
