Page 324 - THE MARKET WHISPERER

320 PART 10 - Winning Trades

Gaps in Dual Stocks

Breaking the norm are stocks traded on more than one stock exchange,
such as Toyota, which is traded on both Wall Street and the Tokyo Stock
Exchange. These are known as dual-exchange traded stocks.

Since the trading times on Wall Street and Tokyo do not overlap, Toyota

will almost always begin the day with large gaps in accordance with the

closing price of the other stock exchange.

SMART Gap formations in dual-exchange traded stocks are not
MONEY valid! In general, we avoid trading in most of the dual-
exchange traded stocks.

Note how easy it is to determine that Toyota (TM) is a dual-exchange
traded stock:

In the daily chart above for Toyota, we can clearly see that every
trading day opens with a gap. This is a distinct formation indicating a dual-
exchange traded stock.

Market Index Gaps

Since the S&P 500 market index represents the 500 leading stocks, it will
display the cumulative gaps for all the stocks it encompasses. When the
market index opens with a gap up of a half-percent, what does this imply