Tuesday, October 12, 2004

While reactions to earnings reports from YHOO and INTC will likely have an impact on otherwise "normal" market behavior, today's action in the NDX is interesting. There have been 30 times this year where the NDX opened for trading at least 0.5% below where it closed the previous day.  Only 10 times did it fully close the gap that same day by trading above the previous day's close.  While that seems like a positive development, three days later the index was actually LOWER 7 out of the 10 times, with an average return of nearly -1%.  90 days later, it was negative every time and the average return was nearly -5%.  So while today's performance does look promising, and the earnings reports after the bell will likely shape tomorrow's activity, I thought it notable that previous "gap-filling" instances were not necessarily a good sign going forward. 3:34:59 PM