How Markets Are Like History

Around this time every year, something seems to keep many investors sidelined. Then, out of nowhere, a rash of gap-up openings across the board gives that money a chance to chase the market higher.

We saw it last year in the first session of 2011 -- big gap-up openings followed by pullbacks. But the gaps persisted, at least in the S&P 500 Futures, where gaps tend to matter most. In last year's first trading session, the market gapped up with futures popping sharply from the 1253 level, reaching a high of 1272 in early trading. But like today's rally, the high was made early in the day and futures pulled back from there. In the cash, there was no gap. But the gap in the futures at 1253 acted like a magnet for the market when it finally sold off into the mid-March lows for the year. That selloff to fill that gap marked the lows prior to the big surge into the May multi-year highs. It was certainly a tradable low, even though it would be smashed later in 2011....596 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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