You may have heard the saying "gaps get filled". Its usually true in my experience. Sometimes in a fast moving market it takes a long time for the market to get back to that area. But its usually within days or weeks.
The extremely fast run up the past few days in the equity futures left a number of gaps. They stick out like holes in the chart. I started looking for more and found 5 open gaps since 12/3/19. The futures contract rollover from the Dec. contract to the Mar contract was Dec 12-13. So you don't want to go back too far.
I don't know if there's a correlation between the size of a gap and the speed with which it gets filled. I've heard the reason the market likes to fill gaps is because there may be unfilled orders sitting in those gaps that didn't get the opportunity to be filled. If that's true, then the bigger the gap, the more orders might be sitting in there. And that would increase the desire to go back and fill those big gaps.
After today's close of the YM Mar futures, you can see an Evening Star (3 candle pattern) with high Stochastics. That's a bearish sign. If we go down from here to fill those gaps, then we'll form a double top, where the tops will be the peaks on 1/17/20 and yesterday 2/6/20. A double top is also a bearish pattern.
We didn't close under the 8ema today, so the Evening Star hasn't confirmed yet. We'll have to sit out the weekend and see what happens next week.
Why worry, the Fed has our backs, right?
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