Gap Rule

If there is a gap, and it is going to reverse, it will do so 10 to 15 minutes after the opening 95 percent of the time. If the market continues in the direction of the gap after 10 to 15 minutes, it is a strong sign that the move will continue for the rest of the day, closing in that direction as well. Even if the market reverses after 10 to 15 minute period, if it fails to fill the gap, odds are that the market will close in the direction of the gap. This also applies to stocks and other commodities.

When you have a gap above or below a trend line, it indicates an important change (news and/or fundamental) and points to a change of trend. This rule can be used only in conjunction with another confirming principle.

                                                   
                                                                                                ------Victor Sperandeo