Karpel’s Corner: What happened to the Gap and Go?

Welcome to Karpel’s Corner. This is where I throw out my thoughts on the markets and share some of my favorite strategies. I keep it market-focused, and never miss an opportunity to teach trading strategies and commentate on the latest trends affecting the financial markets. Hope you enjoy today’s post!

The S&P 500 SPDR ($SPY) is forging a short-term reversal from the lows of last week. It is noticeable how the ETF gapped below $187 last Wednesday, stalled for two days, then gapped above $187 on Friday.

The ETF is back above $192 and over the 200-day moving average. It is now the support, and not filling the gap. The reversal is valid in spite of yesterday’s pullback.

A move below $186 would clearly fill the gap and negate the reversal. If you take a look at the Commodity Channel Index (CCI), it has broken into positive territory and has bullish momentum. I believe this gap is also holding and should be considered short-term bullish.

We added three new names to the Tradespoon Bulls Conviction List: Nike ($NKE), ASML Holding NV ($ASML), and Amphenol Corp ($APH).

See you next time at the Corner!