Trading GG After a Gap 041608

As expected, the market gapped higher today. That means it’s time to use those charts with smaller time frames to find entries. You never know if the gap will hold. I’ll often give the market 15 - 30 minutes before entering any trades. The first pullback after a gap higher is more likely to fail, than a pullback without a gap. It also gives me time to spot strong sectors. Gold was very strong, and hit my radar. From there, I nail it down to the eight gold stocks in my watchlist. This allows better focus.

GG gave plenty of time to find an entry on the 2nd pullback. Risk is less than .15. My goal is to pull .45 out of this trade. I’ll sell in partials on the way up. My main goal is to hop on and off with a predefined risk.

The Nasdaq held up well today. I noticed a move over the trendline on the 60 minute chart. With advancers leading decliners by 28 to 5, it confirmed a broad rally. We’ll have to see what happens near resistance at 2390 - 2400.