Gaps

What this video covers

• The exact definition of an up gap (today's low above yesterday's high) and a down gap (today's high below yesterday's low)
• Why gaps reflect a sudden shift in supply and demand, and the heuristic that gaps tend to be filled later
• How to identify a breakaway gap at the start of a new trend out of congestion, and why strong volume makes it less likely to fill quickly
• How to identify a runaway gap (also called a measuring gap) in the middle of an established trend as a continuation signal
• How to identify an exhaustion gap near the end of an extended move and why it warns of a possible reversal
• Why location in the trend distinguishes gap types, not simply high versus low volume
• The critical exam trap that an exhaustion gap comes on high, climactic volume (not fading volume), and why it tends to fill quickly