How Price Gaps Help Traders Hit the "TARGET" of Opportunity
Here's how a bearish price gap on Target's chart foretold of the retail giant's Q1 2020 nosedive
By Elliott Wave International
As many of us continue the process of working from home, isolated
with young children and significant others day in and day out, the
subject of price gaps feels paradoxically fitting.
Here's why: After countless hours of sharing the same tight-knit
space of finger-painting on the walls, dirty dishes, and zero social
outlet, in comes your partner. You nervously ask, "Are you okay?" To
which she replies with the most frightening of all four-letter "F"
words,
I'm "F-I-N-E"
And that's when you know it's time to brace for impact.
"FINE," in its vacant hollowness, is the equivalent of a gap on a
price chart. They are generated in extremely tense, emotional market
environments when a spike in volume and volatility makes prices jump so
fast that they leave an empty space on the chart.
Indeed, in today's emotional market environment, price gaps are everywhere, from bonds to bitcoin to big tech and beyond:
- "Price Gap Triggers Fear for Bond ETF's" (March 29 Yahoo! Finance)
- "A CME Gap at $3500 Leaves Bitcoin Vulnerable" (April 14 Bitcoinist)
- "Apple Gaps Below Key Moving Average." (April 2 The Street)