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Old 09-23-2006, 09:31 PM
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Re: Understanding Gaps: Why do they exist?

Glad it helped.

Its always a good idea to look for clues to why the markets gapped up as much as it did. I usually start by going over any economic number that came out. There are several extremely important ones and alot of mediocre ones. For example, if the CCI, Employment Situation, GDP, etc.. and the markets gap I will be careful. These numbers can often cause a contiunation gap. If the economic numbers are not as significant, I will then look at the SSF's to see if there is any action premarket.

There is an excellent book called, The Secrets of Economic Indicators by Bernard Baumohl. I often use this book as referennce since I am from Japan and not familiar with all the different economic numbers.

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