Gap and Run - Oct 10, 2011

Significant price gaps fall into the same category as major lows and major highs in that each of these three events should be viewed as a critical state ending one phase and beginning another. Provided the up-gap made today remains in place through the end of this week, then we should see the NDX test the highs for the year just above 2400. And similarly we should see the SP500 as per the SPY test the mid June lows at about 127. The point-E symmetry mentioned in my previous post was only able to bring one down day on Friday last week. Instead of the expected turn, this phase transition has produced the up gap. It will not be a straight shot higher toward NDX 2400 or SPY 127 but the usual 3-phase move.