A Cautious Holder
You may recall that on that last expiration, Friday, Dec. 21 (which happened to be a quadruple expiration), the market sold off and sold off hard. Not only that, but it gapped down big time and left overhead gaps to be filled. That selloff was in response to House Speaker John Boehner's inability to get Plan B to a vote in the House the day before, and at about 8:00 p.m. that evening, the S&P 500 Emini futures collapsed about 50 points. Yes, it's ancient history now, but what's important about that episode was the gap that was left and the subsequent island that has since been created.
The futures sold off to a low of 1391.25. That level wasn't seen in Friday's open outcry session, as the low, once the cash markets began trading, was only 1416.50. But there was that massive gap left from 1440.50 to 1428.00 that wasn't revisited until this past Wednesday, Jan. 2. That day, the market popped up from its New Year's Eve close of 1420 and shot up to 1444. That level was the low on Jan. 2, so the Jan. 2 gap in the futures is 1420-1444. That's a massive gap....573 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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