The New Year’s Day breakaway gap — if not filled — could lead to an entire year of upside gain
In 2012, New Year”s Day fell on Sunday. The markets were offically closed on Monday, and opened the New Year on Tuesday, January 3.
However, the electronic markets traded on both January 1 and 2, 2012 — gapping substantially higher right from the start on Sunday afternoon’s open. So when traders returned on Tuesday the U.S. stock indexes are sharply above the December 20, 2011 closing levels. While the S&Ps came back down and barely closed the gap on January 5, the Nasdaq never closed its gap and trended higher the rest of the year.
In other words, the New Year’s Gap (2012) was a daily and weekly gap and go.
It is now déjà vu all over again. The S&Ps gapped higher on Monday, January 1, 2013. This gap, if not filled, will be yet another daily and weekly New Year’s Day Gap and Go. Note that the S&Ps could completed a 13-week symmetrical triangle in the process.
Markets: $SPY, $ES_F, $SPX, $QQQ, $NQ_F