Why I Bought Weakness – 2 Gaps

I prefer trading into strength. Last week though, a seven day bearish streak concluded with the worst Thanksgiving trading week since 1932. Now, I can’t just buy on that fact alone. I started looking for clues, and noticed that a few ETF longs had formed 2 gaps within the seven trading days. When Friday ended at the low, it was one more extreme to the bearish side. Usually, at least one of those gaps will get filled fairly fas,t before a trend continues. With these thoughts, I figured TNA, DIG and BGU were worth buying. This time the risk/reward paid off with a Monday gap higher.