Finding Invisible Trading Gaps

Michael C. Thomsett

Gaps are significant signals, as most technical analysts will agree. However, you might be missing some extremely important gaps, those that are not visible without a more in-depth analysis of the price pattern.

The obvious gaps show up with clear spaces in between trading ranges from one day to the next. These are easy to spot. Other gaps provide equally important technical signals, notably foreshadowing a reversal in trend direction, but these are subtle and not visible with the same quick glance. When these occur, notably several times in close proximity or along with sessions showing visible gaps, they are exceptionally strong.

A few observations worth remembering:

1. The type ...

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