Gap Patterns in Focus: What GOOGL, AAPL, and the S&P 500 Are Telling Us [View all]

https://articles.stockcharts.com/article/gap-patterns-in-focus-what-googl-aapl-sp500-are-telling-us/

"The S&P 500 ($SPX) index gapped higher to finish the week at yet another new all-time high. This latest gap, while bullish on the surface, would need to be validated by some sort of follow-through next week. Otherwise, we could be faced with the dreaded gap and fail or “jump and dump” pattern.

Today, I'm going to break down how price gaps can be valuable for gauging investor sentiment, particularly the action in the days immediately following the price gap. I’ll share examples of bullish and bearish gap behavior, and then outline three charts with recent gaps that need to be validated next week...


... Will the S&P 500 Confirm a Gap and Fail Pattern?

We can also observe a clear shooting star candle pattern on the chart of the S&P 500, with the open and close near the low of Friday’s trading session. The gap on the S&P 500 is not a significant gap, such as the ones we described on the chart of ORCL, but the price action after this small gap could end up serving as an important piece of evidence going into the first full trading week of May..."