From Edwards and Magee :"The common superstition is that a gap...

From Edwards and Magee :"The common superstition is that a gap must be closed". Sometimes it is stated more cautiously in such words "If a gap isn't closed in three days, it will be closed in three weeks. If its not closed in three weeks, it will be closed in 3 moths, etc-" There are numerous variations but they all add up to the belief that a gap must be closed and that the trend is not to be trusted until the gap has been covered. It is the latter inference which leads to error"

""MUST A GAP BE CLOSED BEFORE PRICES MOVE VERY FAR AWAY FROM IT?. CERYAINLY NOT! WILLIT BE CLOSED EVENUTALLY? PROBABLY YES. But that may be years later,. if at all.

"If you will the matter over for a moment, you will see that the probabilities we have stated above for a gap bein closed apply just as well to a stock's retruning to ANY price range at which it has once been traded, gap or no gap"

Edwards and Magee go on and talk about Common or area gaps, breakaway gaps, continuation and runaway gaps, two or more runaway gaps, exhaustion gaps, Island point reversals (two gaps)


As you can see, merely looking at a gap has no significance unless you know what type of gap it is.