The S&P500 Magnificent Seven That's Seven Unfilled Gaps in the S&P500 and most gaps eventually fill, but there is no guarantee that they will all fill this year. Our thinking is that most of the unfilled gaps of 2023 will be filled is a reasonable one.
However, there are also a few reasons why gaps are likely to fill. One reason is that gaps can act as areas of support or resistance. This means that the price of the stock is more likely to bounce off of the gap rather than break through it. Another reason is that gaps can be filled by traders who are trying to take advantage of the mispricing that occurs when a gap forms.
Overall, it is impossible to say for sure whether or not the unfilled gaps of 2023 will be filled. However, your thinking that they are likely to fill is a reasonable one.
Here are some additional things to keep in mind about unfilled gaps:
July 27 SPX 4528
July 13 SPX 4488
July 12 SPX 4443
June 2 SPX 4232
May 4th SPX 4082
March 30 SPX 4030
March 29 SPX 3979
Market inefficiencies. When a gap forms, it's often because there is an inefficiency in the market. For example, a gap up might occur if there is some positive news that is released after the market closes. However, not all investors will be aware of this news until the market reopens the next day, so the price of the stock might not immediately reflect the news. This creates an opportunity for investors to buy the stock at a lower price than it should be trading at, which eventually leads to the gap being filled.
Order imbalances. Gaps can also form due to order imbalances. This happens when there are more buyers or sellers of a stock than there are shares available to trade. For example, if there are a lot of buyers of a stock but not many sellers, the price of the stock might gap up. This is because the buyers are willing to pay a higher price for the stock than the sellers are willing to sell it for. Eventually, the sellers will be forced to sell their shares at the higher price, which fills the gap.
Technical analysis. Some traders believe that gaps can be used to predict future price movements. For example, a gap up might be seen as a sign of bullish sentiment, which could lead to the price of the stock continuing to rise. This can create a self-fulfilling prophecy, as traders who see the gap up might be more likely to buy the stock, which could lead to the price actually rising.
How to Navigating the Current Market Conditions: