Three Types of Morning Openings

Cobra

Knowing how the market (or a stock) opens in relation to yesterday’s trading can give you a clue about what’s likely to happen for today’s trading. What are the three types of openings and what might they mean?

 

1. No Change

This is the most typical opening, where today’s open is either equal or very close to yesterday’s close.

 

When this happens, it increases the chance that the day will be more neutral or rangebound, and decreases the chance that the day will be a trend day.

 

2. Gap, But Within Yesterday’s Range

When a market gaps up or down, it is indicative that there has been some sort of supply/demand imbalance that has changed overnight. Perhaps it was a news announcement or some other stimulus, but the gap is not too distant from yesterday’s close.

 

It is often better to trade against the gap, betting that it will ‘fill,’ which can establish an early morning trade. These instances increase the odds that a gap will fill.

 

Also, odds still favor some sort of consolidation (or rangebound) day, but the odds for a trend day are slightly higher than for the typical (no change) opening.

 

3. Gap Outside Yesterday’s Range

Gaps of this nature show potentially significant supply/demand imbalance, or that a major announcement or event has changed the calculus of traders’ expectations. Perhaps one side is being ’squeezed’ and that the other side is showing dominance.

 

Gaps outside yesterday’s range have lower odds of filling, especially if they occur significantly outside yesterday’s range.

 

Such gaps increase the odds that the day’s trading will lead to a trend day, where the market (a stock) will open at one extreme and close on the other extreme. The odds that the day will resolve into a trading range are much lower than the other types of openings.

 

The type of morning opening gives you clues about what is likely to happen (or not happen) for the rest of the trading day.

 

xiaobailong

balto

金牛银熊

大才小用啊。。。。科学普及从娃娃抓起。。。。

pan_xyang

谢谢阔大

ewbp

多谢Cobra 班长，我是“娃娃”

继续科普，

原帖由 Cobra 于 2008-4-14 13:36 发表 Knowing how the market (or a stock) opens in relation to yesterday’s trading can give you a clue about what’s likely to happen for today’s trading. What are the three types of openings and what mig ...

calm

great!

xssl

救青蛙于水火。。。。

大泡泡

cici08

fu2008

:(227): :(227):

usami

要是早点看到就好了。。。。

又忘了密码

谢蛇老大，这个第二种情况俺今天就遇到了；还有老大指导的止损位没学好，少设了万分之四点三，本来应该改的，偷了懒，在超过俺的止损位万分之二点一的位置stop out了，教训血淋淋啊 [ 本帖最后由 又忘了密码 于 2008-4-14 17:11 编辑 ]

liuyifei

thanks cobra！ you are the man！

Bencat

Interesting. thank you!

lami

这些规律有统计数据吗？感觉第三种比较少，就是daily chart gap up/down吧。更多的应该是开盘gap后，就会当天补上再转向。

ryanx30

Very useful for day trading. I recently observed a general pattern for most of the days in last 2 weeks (except last Friday): 1) morning: market try to go up or go down a little bit; 2) at around noon, the market will suddenly go a lot higher; 3) after lunch around 1:00 PM, market goes down; What's happened is that retail investors do bargain hunting in the morning but professional traders do sell after lunch. So I will usually setup short position around noon by calculate the range. I don't expect this pattern will last forever though.

firecs

股市没这么规律的。一次失手，可能9次的profit都掉了

原帖由 ryanx30 于 2008-4-14 22:18 发表 Very useful for day trading. I recently observed a general pattern for most of the days in last 2 weeks (except last Friday): 1) morning: market try to go up or go down a little bit; 2) at around ...

松骨峰

enrontyco