Chapter 10. Putting It All Together

Discussions of gaps are frequent in the technical analysis literature. Pick up an issue of Technical Analysis of Stocks and Commodities or Active Trader and often there is an article that mentions gaps. Turn on the financial news, and you will probably not have to listen long before you hear gaps mentioned. Pick up a book on technical analysis, and you can find a discussion of gaps. Do an Internet search about technical analysis, and you can find a proliferation of Web sites that discuss gaps. Although this interest in gaps is not new, there has been surprisingly little systematic study of gaps.

Technical analysis has traditionally been a visual activity. Although computer technology has allowed for algorithmically ...

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