Unfilled Gaps from Highs

Wednesday was the first significant day of selling in a while.  The gap down in the SPY never filled and the market dropped for most of the day.  Below is a study that examines SPY perfromance following other instances of unfilled gaps down from a 50-day high.

These unfilled gaps from high levels often lead to more selling over the next few days.  The edge isn’t huge, but it appears worthy of consideration.