In a light of history, there seems to be a edge after huge gap down days. Gaps could always be taken seriously and studied carefully, because they could have a meaning behind them. One good source to study gaps is Stock Charts, where you can find good definitions. Yesterday's gap could be exhaustion gap, which could be defined by increase in volume.
From the table above, you can clearly see what has happened after we have seen gaps down. The profit is calculated from a close of the gap day to the close of a next day. The statistics is from 1995-2011.
From the table above, you can clearly see what has happened after we have seen gaps down. The profit is calculated from a close of the gap day to the close of a next day. The statistics is from 1995-2011.
| gap down | positive day | average % | stdev | max | min |
| -3,00 % | 77,78 % | 3,34 % | 4,95 % | 11,40 % | -2,04 % |
| -2,50 % | 69,23 % | 1,92 % | 4,82 % | 11,40 % | -4,88 % |
| -2,00 % | 69,57 % | 1,58 % | 3,85 % | 11,40 % | -4,88 % |
| -1,50 % | 65,22 % | 0,75 % | 3,31 % | 11,40 % | -6,25 % |
| -1,00 % | 61,83 % | 0,35 % | 2,46 % | 11,40 % | -6,25 % |
| -0,50 % | 56,43 % | 0,13 % | 1,88 % | 11,40 % | -6,29 % |
| 0,00 % | 54,75 % | 0,04 % | 1,64 % | 11,40 % | -6,84 % |
