Markets Close the February Gap
Friday market the official “closing” of the gap created by the “shock” decline in late February ’07. The market is now at a technical decision node, and will either reverse off the gap closure or continue higher. Either way, there may be a technical pause at this level if traders who were trapped by the gap now use the return to this level as a “gift from God” to exit their positions, as they just suffered through pain as an investor. Of course, they may not think of this at all and continue holding unabated and relieved at the recent market strength.
The Dow closed the gap ($INDU does not officially record gaps in its price weighting)
The Nasdaq Closed the Gap (April 13)
I also wanted to include a couple of Weekly Charts which still (currently) show rather healthy technical uptrends.
Dow Jones Weekly Chart (April 13th)
NASDAQ Weekly Chart (April 13th)
Even swing traders benefit from studying the basic price action on higher time frames and sector analysis. Day traders are helped by knowing intermediate trends, but also longer trends often drive daily movement.
Best of luck this week.