mirroring it, having pulled back to an objective level of weekly
demand from the low in mid oct 2014 where price
rocketed off. I am hoping that there will be some unfilled
buy orders or a large enough supply/demand imbalance to push price
higher. My entry on this trade will be a tick above 82.35.
Should it trigger I will use a time stop as IMHO if momentum doesn't
step in shortly it probably isn't there.
If there is a gap just BEFORE a turning point /pivot high or low you can expect the gap to be FILLED. This kind of gap is showing trend exhaustion, it depicts the final hurrah of the current trend, lots of greed.
If the gap occurs AFTER a turning point (like above on 2015/01/21) then this shows IT'S STRONG. There was a turning point / pivot high and there was such heavy selling that price gapped down off it. Because of the speed of the move you can expect 1. lots of people couldn't get in because the move surprised them as it was so quick. therefore 2. there's potentially lots of unfilled sell/short orders around the gap and 3. there was and still might be a large supply/demand imbalance at that level.
For these reasons when price returned to that gap down AFTER a pivot high I took profit in expectation that there would be a lot of sell and short orders sitting there.