New Day Opening Gap

"This is for specifically the index markets."

"At 5:00 p.m., again, every day except for Friday, the market closes at 5:00 p.m. It's it's just it stops and it pauses for an hour and then it resumes at 6 PM Eastern Standard Time."

"These gaps will be referred to for a week. Now, sometimes you'll see they actually get referred to couple weeks later still they'll they'll be sensitive because they're real algorithmic arrays where the market will refer back to them."

"If you take your one minute chart, you don't have to have live data to do this. It's something that is a longterm effect on price action. It'll it'll be used for weeks."

"When you annotate them, put it on the middle and to the right and then you label it. Real important that you put the date in it. Whatever format you want to use, that's that's up to you. But that format or that date rather helps you organize the level of importance."

"The three levels here. Consequent, which is the midpoint, the highest high, and the lowest low. What's the high? Whichever's higher, where we stopped at five o'clock, or where we opened at 6:00."

"Why is it consequent encroachment and not equilibrium? Because equilibrium is a range that has been delivered up and down. Okay? Think of it like a trading range. This is not a trading range. It's a gap. It's a real gap."

"That real gap has a missing level of buying and selling. There's really no buying and selling yet because we stopped trading on the previous session at 5:00 and then resume trading here. So, there's nothing being offered as a buy or sell. No printed trades until that opening right there."

"Consequent encroachment is the midpoint of any gap or any inefficiency."

"New day opening gaps have a life cycle of five days."

"Five trading days, not five calendar days, five trading days. Okay? If you have a holiday, skip that and add one more day to it. And that's kind of like your life cycle for new day opening gaps."

"They can act like magnets where it draws price back down to them because these levels, these gaps have real value in them because there's an absence of any real trading."

"You can use them longer if you want to... you're going to discover that they work six months, nine months still away because there are actual places where the market didn't really efficiently trade."

"And truth be told, I will use them nine months in the past if it's if it's within the narrative I'm expecting to see price behave around them. And that part is experience."

"New week opening gaps go back with a life cycle of five weeks. So, you're always going to have five weeks of new week opening gap."

"A new week opening gap is where we stop trading on Friday at five o'clock and then where we open up at on the Sunday at 6 PM and then you mark it the same way here. The only difference is is you would say NWG which is new week opening gap."

"They tend to be very sensitive still five weeks back. Now that's not a it's ended at five weeks and you can never refer to them again. Okay? It's just a general rule or principle that you can start with."

"If you have a clustering of new day opening gaps predominantly above where the market's trading at and maybe there's one where you're trading at now around the market or maybe it's below you. Where do you think the market's more likely to go?"

"It's going to gravitate where the multitude of inefficiencies existed because it's going to give the market an opportunity to go back there again. Why? Because there are people in this industry that trade with this information that you're not supposed to have. And it provides that that vehicle of entry, that mechanism of repricing up there."

"If we take this level here and we add 75 and 25, 0.25, 0.75. What that does, it grades into equal quarters the range."

"Look how price gravitates around the upper quadrant. See that? See how it's gravitating around that? And it expands just a little bit... And then boom, we trade down to consequent encroachment. And then one more time. Look where it trades. That lower quadrant."

"If it's a cibby, that means it's a it's a down close fair value gap. The midpoint is consequent encroachment. The best shorts will form at the lower half of that because you want to see the upper half left open."

"A midpoint of a bissy, which is an up close fair value gap. The best fills for going long are going to form in the upper half of that. You want to leave the lower half open. Why? Because you want to see it create a breakaway gap."

"That that inability to fill in that area down there. And if it rallies, that indicates to you that the algorithm is really going to start spooling quickly and you anticipate large range expansions."

"What's it missing? Sellside delivery, not sellside liquidity, sellside delivery."

"So if you look at this candlestick here, we open and trade it up. So there's nothing passing down into that candle's low or I'm sorry, the opening price. It's it's not it's not offered yet."

"And then it starts trading. But what is it doing? It's delivering uh buy side delivery. That means it's going up. So, what is it lacking? Sellside delivery."

"You're always going to have like a floating reserve on your charts of five weeks of new week and five days look back for new day opening gaps."

"On trading view, you want to create a layout. Okay? You want to create a layout that has a title that maybe it's new week opening gaps. And on that layout, the only thing you have referenced for the market that you trade or markets um are simply just the new week opening gaps."

"I have a a journal page, a spiral notebook basically, and I write down every single new day opening gap, high and low, and its midpoint or or consequent encroachment. And I keep a running log of that. And as long as we're 150 handles in close proximity to any one of them, then I personally will look at them."