The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again at optionalpha.com and welcome back to the daily call. Today, we’re going to be answering the question, “Are continuation gaps and exhaustion gaps really reliable indicators for charting and trading?” A lot of the information that we get here today is really coming from thepatternsite.com and in particular, a lot of the research that Thomas Bulkowski has done before on patterns. He's got a book on patterns called “Encyclopedia of Chart Patterns.” There’s a first edition, second, I think there's even a third edition, but you can go out and check it out. But again, a lot of these results are coming from his continuational research and back-testing of gaps and trying to understand what gaps actually do in markets, do they actually work in markets or not and I think it’s pretty interesting. Really, what gaps are and in many cases, these two examples, we’ll go over here in a second, but gaps are really just these breakaways that happen in chart patterns. It's where the high, t