The chart below shows a common scenario when the SPY has been in a recent downtrend and then gaps above the declining 5 DMA. I am posting this as a potential scenario for trading tomorrow. Of course, it is not meant as a blueprint for what will happen but certainly a possibility to be aware of. As we know, there are no certainties in the market and we are in the middle of an exceptionally uncertain time with the election on Tuesday. As always, the proper way to handle a gap is to wait to see how it holds the initial move and then trade on a shorter timeframe.
I have a commitment that will keep me away from the market for most of the morning. It is unlikely I will be back before it is time for the midday video, but do check for it just in case.
