I haven't been updating my blog due to my ever busy schedule, so finally I have the time to once again perform some dissecting and analysis. I was looking at StraitsAsia and realized the upmove should be over by today. Not only today exudes bearish symptoms but the gap is exhausted. This gap is to entrap all the last min bull to buy when big sellers are selling big time. I am only looking for shorts.
Normally there are different forms of gap in different phases of the market. See the attached.
Bull Gap - A gap to encourage the sellers not to sell and disallow any public purchasing. Imagine, if you see the stock at 1 dollar yesterday and it went 1.2 today in the opening, will you buy?
Running Gap - A gap that is about to lift off to a higher level. Hold on to your long if you have and buy on a reaction if you haven't done so.
Exhausted Gap - A gap that is exhausted and is ready to tumble. This gap is like where all the profits have been taken by the big sellers and they are now looking to bring the market down.