FNMA Discussion 11/02/2014 07:28:53 $FNMA
next week to 3$
Thank you! I believe this to be true. We are dealing with master strategists with billions at stake. Forget the tens of thousands that the rest of us have invested. As if he's just going to pack up his shares and dismiss without any merit. Are you kidding me??
The chickens are coming home to roost for the shorts. Spin this it how you want bashers, I bought back in at $1.73. My share count is looking mighty healthy right now.
if he was reading it according to wave patterns I am familiar with, the abc correction is over. its on its way up, but then again this is the OTC.
thought so
Sure thing...Check the link...it has a whole bunch of Conservatorship facts...
Thanks Zep
It's on the 10-Q forms...page 165
Quote:
Dividend Restrictions
Our payment of dividends is subject to the following restrictions:
Restrictions Relating to Conservatorship. Our conservator announced on September 7, 2008 that we would not pay any
dividends on the common stock or on any series of preferred stock, other than the senior preferred stock. In addition, FHFA’s
regulations relating to conservatorship and receivership operations prohibit us from paying any dividends while in
conservatorship unless authorized by the Director of FHFA. The Director of FHFA directs us to make dividend payments on
the senior preferred stock on a quarterly basis.
Restrictions Under Senior Preferred Stock Purchase Agreement. The senior preferred stock purchase agreement prohibits us
from declaring or paying any dividends on Fannie Mae equity securities (other than the senior preferred stock) without the
prior written consent of Treasury. In addition, in 2012 the terms of the senior preferred stock purchase agreement and the
senior preferred stock were amended to ultimately require the payment of our entire net worth to Treasury. As a result, our net
income is not available to common stockholders. For more information on the terms of the senior preferred stock purchase
agreement and senior preferred stock, see “Business—Conservatorship and Treasury Agreements—Treasury Agreements—
Senior Preferred Stock Purchase Agreement and Related Issuance of Senior Preferred Stock and Common Stock Warrant” in
our 2013 Form 10-K.
Additional Restrictions Relating to Preferred Stock. Payment of dividends on our common stock is also subject to the prior
payment of dividends on our preferred stock and our senior preferred stock. Payment of dividends on all outstanding
preferred stock, other than the senior preferred stock, is also subject to the prior payment of dividends on the senior preferred
stock.
Statutory Restrictions. Under the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by
the 2008 Reform Act (together, the “GSE Act”), FHFA has authority to prohibit capital distributions, including payment of
dividends, if we fail to meet our capital requirements. If FHFA classifies us as significantly undercapitalized, approval of the
Director of FHFA is required for any dividend payment. Under the GSE Act, we are not permitted to make a capital
distribution if, after making the distribution, we would be undercapitalized, except the Director of FHFA may permit us to
repurchase shares if the repurchase is made in connection with the issuance of additional shares or obligations in at least an
equivalent amount and will reduce our financial obligations or otherwise improve our financial condition.
http://www.fanniemae.com/resources/file/ir/pd...q22014.pdf
On Fannie Mae's home page for investor relationship you see this box at the top.
http://www.fanniemae.com/portal/about-us/inve...index.html
In it it says:
We have been under conservatorship, with the Federal Housing Finance Agency acting as conservator, since Sept. 6, 2008. We also have entered into a senior preferred stock purchase agreement with the U.S. Department of the Treasury pursuant to which Treasury has committed to provide funding to us under specified circumstances. More information regarding the conservatorship and our agreement with Treasury is provided in our most recent Form 10-K, and may be supplemented by information in any subsequent Form 10-Qs, which are available under "SEC Filings."
I have been looking thru the 10-K's but have not found anything mentioning conservator ship or any explanation of an agreement that was made with Treasury.
Does anyone know where, or has anybody found where this info is located.
Here's a chart for all you so called gap traders...notice how the long wick on the 11th is not considered a gap...
Mortgage Bond Chart...
I am not an expert in charts. But with my limited knowledge, I assume FNMA is not a normal stock to depend on charts completely.
Appreciate your analysis and time but IF we do get some amazing news this week... Charts /analysis will be irrelevant... Hoping for the best for longs..
GLTA
$$$$$FNMA$$$$$
This is a great concern I have at this point regarding FNMA. I am not an expert. Please don't get me wrong. I am not being negative or postive but giving you a dose of reality as I see it for what it is worth. Here is a chart of FNMA during a correction in late 2007 - early 2008. I believe history is repeating. You can clearly see the dome pattern in effect with volume forming a saucer shape and price a dome. The 50day MA has fallen below the 200day MA. Conditions are almost similar. Your thoughts.
Thank you...
Right.. Kingboy, when you take your money out of the market, you were making a smart investing move. But when others decided to take a risky position and stay long, they are greedy, eh? Longs are ready for big upsides, and big downsides - this is OTC after all.
Somehow you seem to have mastered the knack of crawling out from under a rock every time you sense others with more fortitude looking to be in a good position. Pretty sad...
Gaps and Gap Analysis
Have you ever wondered what causes gaps in price charts and what they mean? Well, you've come to the right place. Just in case, a gap is an area on a price chart in which there were no trades. Normally this occurs between the close of the market on one day and the next day's open. Lot's of things can cause this, such as an earnings report coming out after the stock market has closed for the day. If the earnings were significantly higher than expected, many investors might place buy orders for the next day. This could result in the price opening higher than the previous day's close. If the trading that day continues to trade above that point, a gap will exist in the price chart. Gaps can offer evidence that something important has happened to the fundamentals or the psychology of the crowd that accompanies this market movement. Before we get into the different types of gaps, here is a chart showing a gap so you will know what we are talking about.
Gaps appear more frequently on daily charts, where every day is an opportunity to create an opening gap. Gaps on weekly or monthly charts are fairly rare: the gap would have to occur between Friday's close and Monday's open for weekly charts and between the last day of the month's close and the first day of the next month's for the monthly charts. Gaps can be subdivided into four basic categories: Common, Breakaway, Runaway, and Exhaustion.
Common Gaps
Sometimes referred to as a trading gap or an area gap, the common gap is usually uneventful. In fact, they can be caused by a stock going ex-dividend when the trading volume is low. These gaps are common (get it?) and usually get filled fairly quickly. ”Getting filled” means that the price action at a later time (few days to a few weeks) usually retraces at the least to the last day before the gap. This is also known as closing the gap. Here is a chart of two common gaps that have been filled. Notice that after the gap the prices have come down to at least the beginning of the gap? That is called closing or filling the gap.
A common gap usually appears in a trading range or congestion area, and reinforces the apparent lack of interest in the stock at that time. Many times this is further exacerbated by low trading volume. Being aware of these types of gaps is good, but doubtful that they will produce a trading opportunities.
Breakaway Gaps
Breakaway gaps are the exciting ones. They occur when the price action is breaking out of their trading range or congestion area. To understand gaps, one has to understand the nature of congestion areas in the market. A congestion area is just a price range in which the market has traded for some period of time, usually a few weeks or so. The area near the top of the congestion area is usually resistance when approached from below. Likewise, the area near the bottom of the congestion area is support when approached from above. To break out of these areas requires market enthusiasm and, either, many more buyers than sellers for upside breakouts or more sellers than buyers for downside breakouts.
Volume will (should) pick up significantly, for not only the increased enthusiasm, but many are holding positions on the wrong side of the breakout and need to cover or sell them. It is better if the volume does not happen until the gap occurs. This means that the new change in market direction has a chance of continuing. The point of breakout now becomes the new support (if an upside breakout) or resistance (if a downside breakout). Don't fall into the trap of thinking this type of gap, if associated with good volume, will be filled soon. It might take a long time. Go with the fact that a new trend in the direction of the stock has taken place, and trade accordingly. Notice in the chart below how prices spent over 2 months without going lower than about 41. When they did, it was with increased volume and a downward breakaway gap.
A good confirmation for trading gaps is if they are associated with classic chart patterns. For example, if an ascending triangle suddenly has a breakout gap to the upside, this can be a much better trade than a breakaway gap without a good chart pattern associated with it. The chart below shows the normally bullish ascending triangle (flat top and rising, lower trend line) with a breakaway gap to the upside, as you would expect with an ascending triangle.
Runaway Gaps
Runaway gaps are also called measuring gaps, and are best described as gaps that are caused by increased interest in the stock. For runaway gaps to the upside, it usually represents traders who did not get in during the initial move of the up trend and while waiting for a retracement in price, decided it was not going to happen. Increased buying interest happens all of a sudden, and the price gaps above the previous day's close. This type of runaway gap represents an almost panic state in traders. Also, a good uptrend can have runaway gaps caused by significant news events that cause new interest in the stock. In the chart below, note the significant increase in volume during and after the runaway gap.
Runaway gaps can also happen in downtrends. This usually represents increased liquidation of that stock by traders and buyers who are standing on the sidelines. These can become very serious as those who are holding onto the stock will eventually panic and sell – but sell to whom? The price has to continue to drop and gap down to find buyers. Not a good situation.
The term measuring gap is also used for runaway gaps. This is an interpretation that is hard to find examples for, but it is a way of helping one decide how much longer a trend will last. The theory is that the measuring gap will occur in the middle of, or half way through, the move.
Sometimes, the futures market will have runaway gaps that are caused by trading limits imposed by the exchanges. Getting caught on the wrong side of the trend when you have these limit moves in futures can be horrifying. The good news is that you can also be on the right side of them. These are not common occurrences in the futures market despite all the wrong information being touted by those who do not understand it, and are only repeating something they read from an uninformed reporter.
Exhaustion Gaps
Exhaustion gaps are those that happen near the end of a good up- or downtrend. They are many times the first signal of the end of that move. They are identified by high volume and large price difference between the previous day's close and the new opening price. They can easily be mistaken for runaway gaps if one does not notice the exceptionally high volume.
It is almost a state of panic if the gap appears during a long down move where pessimism has set in. Selling all positions to liquidate holdings in the market is not uncommon. Exhaustion gaps are quickly filled as prices reverse their trend. Likewise, if they happen during a bull move, some bullish euphoria overcomes trades, and buyers cannot get enough of that stock. The prices gap up with huge volume; then, there is great profit taking and the demand for the stock totally dries up. Prices drop, and a significant change in trend occurs. Exhaustion gaps are probably the easiest to trade and profit from. In the chart, notice that there was one more day of trading to the upside before the stock plunged. The high volume was the giveaway that this was going to be, either, an exhaustion gap or a runaway gap. Because of the size of the gap and the near doubling of volume, an exhaustion gap was in the making here.
Conclusion
There is an old saying that the market abhors a vacuum and all gaps will be filled. While this may have some merit for common and exhaustion gaps, holding positions waiting for breakout or runaway gaps to be filled can be devastating to your portfolio. Likewise, waiting to get on-board a trend by waiting for prices to fill a gap can cause you to miss the big move. Gaps are a significant technical development in price action and chart analysis, and should not be ignored. Japanese candlestick analysis is filled with patterns that rely on gaps to fulfill their objectives.
That's a keeper!
Quote:
Well you know how it doesn't mean it will, but it means it might, but you never know if it does or not unless it does cause you know it could unless it doesn't and then you will see cause if it does you will never know when it won't and it always will cause it will and you know it will cause it, well just cause like I said its just cause.
That should about clear it all up and you can keep your doctor if you want to.
What it means for Pershing Square to Voluntarily dismiss lawsuit in Lamberth's court===from Yahoo MB
Pershing Square has two active lawsuits - one in Lamberth and the other in Sweeney's court. Recently, the government filed a motion with Sweeney to force a decision 1) Stay the case before Sweeney or 2) Dismiss due to overlaps with the case in Lamberth's court. The 3rd option available to Sweeney was to Deny the motion to stay, but still with risk of government filing for dismissal. What nobody expected was a masterful nuclear-move by Pershing Square to voluntarily dismiss the lawsuit before Lamberth. In this game of Chess, Pershing Square has sacrificed a Knight to announce a Check Mate. No lawsuit in Lamberth's court = No case for government's Motion to Stay. The end result is the continuation of Discovery as ordered by Sweeney. This is very good news for the shareholders as the Sweeney case is the flagship lawsuit with highest win potential. This case is also feared the most by those afraid of the uncovering of their thievery - not just from shareholders, but from the tax payers and investors worldwide. Congratulations to Pershing and the shareholders.
The problem is that I don't know what the time frame is going to be for this downward correction to complete. I just try to paint the best predictive picture I can at this time with the info available. As far as the volume is concerned you can see that over the past few weeks the volume has been trending down eveytime the price has gone up and then the volume shoots up with every downward correction. So the pattern is materializing. Looking at the chart I would say that we could get a big correction this week. "The "Ackman /Commons” withdrawal of their injunction could be the catalyst.
Fannie Mae Releases September 2014 Monthly Summary "PR Newswire (US)" - 10/31/2014 4:01:00 PM
Outlook for U.S. Economic Growth Still Solid Even as Global Growth Slows "PR Newswire (US)" - 10/23/2014 9:00:00 AM
Walker & Dunlop Originates $108M Fannie Mae MHC Loan "PR Newswire (US)" - 10/21/2014 4:43:00 PM
Successful Crohn’s Disease Drug Trial Send Celgene Shares Soaring and Fannie Mae Jumps on Shareholder Lawsuit "InvestorsHub NewsWire" - 10/21/2014
Fannie Mae Prices $1.32 Billion Multifamily DUS REMIC (FNA 2014-M12) Under Its Fannie Mae GeMS™ Program "PR Newswire (US)" - 10/17/2014 9:00:00 AM
Market Swoon Bruises Some Hedge Funds--Update 1 "Dow Jones News" - 10/14/2014 5:54:46 PM
ALTITRADE PARTNERS™ SAYS A KEY-REVERSAL DAY COULD HAPPEN THIS WEEK "InvestorsHub NewsWire" - 10/14/2014 6:00:00 AM
Americans' Attitudes on Housing Return to Positive Trend "PR Newswire (US)" - 10/7/2014 9:00:00 AM
Fannie Mae Releases August 2014 Monthly Summary "PR Newswire (US)" - 9/30/2014 4:01:00 PM
Near-Term Growth Outlook Remains Intact as Economy Continues to Accelerate "PR Newswire (US)" - 9/23/2014 9:00:00 AM
Minority Borrowers Feel Mortgage Pinch--Update 2 "Dow Jones News" - 9/22/2014 6:54:36 PM
Mortgage Lender Sentiment Survey Results Show Large Lenders Expect Credit Standards to Ease During Next Three Months "PR Newswire (US)" - 9/17/2014 9:00:00 AM
Fannie Mae Prices $986 Million Multifamily DUS REMIC (FNA 2014-M10) Under Its Fannie Mae GeMS™ Program "PR Newswire (US)" - 9/16/2014 9:09:00 AM
HSBC Confirms FHFA Settlement, Will Pay $550 Million "Dow Jones News" - 9/12/2014 5:40:38 PM
Consumer Housing Sentiment Loses Momentum as Income Growth Remains Stagnant "PR Newswire (US)" - 9/8/2014 9:00:00 AM
Fannie Mae Releases July 2014 Monthly Summary "PR Newswire (US)" - 8/29/2014 4:01:00 PM
Goldman Close to Settling FHFA Lawsuit for Over $1 Billion -- Update "Dow Jones News" - 8/22/2014 5:05:39 PM
2014 Economic Growth Expectations Get Boost from Second Quarter Rebound "PR Newswire (US)" - 8/18/2014 9:03:00 AM
Fannie Mae Prices $950 Million Multifamily DUS REMIC (FNA 2014-M9) Under Its Fannie Mae GeMS™ Program "PR Newswire (US)" - 8/15/2014 3:36:00 PM
Common Shareholders of Fannie & Freddie, Including Pershing Square & Three Individuals, File Suit against United States Gover... "Business Wire" - 8/14/2014 8:39:00 PM
NEW CONCEPT LAUNCHES TODAY FOR MICRO-CAP STOCK TRADERS. RECEIVE PAID PRE-PROMO STOCK ALERTS FOR FREE. "InvestorsHub NewsWire" - 8/14/2014 12:29:20 PM
Fannie Mae Releases June 2014 Monthly Summary "PR Newswire (US)" - 7/31/2014 4:01:00 PM
Fannie Mae Releases New Mortgage Lender Sentiment Survey Results "PR Newswire (US)" - 7/24/2014 9:00:00 AM
Economic Growth Expected to Strengthen During Second Half of 2014, But Not Enough to Save the Year "PR Newswire (US)" - 7/23/2014 9:00:00 AM
next week to 3$
Thank you! I believe this to be true. We are dealing with master strategists with billions at stake. Forget the tens of thousands that the rest of us have invested. As if he's just going to pack up his shares and dismiss without any merit. Are you kidding me??
The chickens are coming home to roost for the shorts. Spin this it how you want bashers, I bought back in at $1.73. My share count is looking mighty healthy right now.
if he was reading it according to wave patterns I am familiar with, the abc correction is over. its on its way up, but then again this is the OTC.
thought so
Sure thing...Check the link...it has a whole bunch of Conservatorship facts...
Thanks Zep
It's on the 10-Q forms...page 165
Quote:
Dividend Restrictions
Our payment of dividends is subject to the following restrictions:
Restrictions Relating to Conservatorship. Our conservator announced on September 7, 2008 that we would not pay any
dividends on the common stock or on any series of preferred stock, other than the senior preferred stock. In addition, FHFA’s
regulations relating to conservatorship and receivership operations prohibit us from paying any dividends while in
conservatorship unless authorized by the Director of FHFA. The Director of FHFA directs us to make dividend payments on
the senior preferred stock on a quarterly basis.
Restrictions Under Senior Preferred Stock Purchase Agreement. The senior preferred stock purchase agreement prohibits us
from declaring or paying any dividends on Fannie Mae equity securities (other than the senior preferred stock) without the
prior written consent of Treasury. In addition, in 2012 the terms of the senior preferred stock purchase agreement and the
senior preferred stock were amended to ultimately require the payment of our entire net worth to Treasury. As a result, our net
income is not available to common stockholders. For more information on the terms of the senior preferred stock purchase
agreement and senior preferred stock, see “Business—Conservatorship and Treasury Agreements—Treasury Agreements—
Senior Preferred Stock Purchase Agreement and Related Issuance of Senior Preferred Stock and Common Stock Warrant” in
our 2013 Form 10-K.
Additional Restrictions Relating to Preferred Stock. Payment of dividends on our common stock is also subject to the prior
payment of dividends on our preferred stock and our senior preferred stock. Payment of dividends on all outstanding
preferred stock, other than the senior preferred stock, is also subject to the prior payment of dividends on the senior preferred
stock.
Statutory Restrictions. Under the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by
the 2008 Reform Act (together, the “GSE Act”), FHFA has authority to prohibit capital distributions, including payment of
dividends, if we fail to meet our capital requirements. If FHFA classifies us as significantly undercapitalized, approval of the
Director of FHFA is required for any dividend payment. Under the GSE Act, we are not permitted to make a capital
distribution if, after making the distribution, we would be undercapitalized, except the Director of FHFA may permit us to
repurchase shares if the repurchase is made in connection with the issuance of additional shares or obligations in at least an
equivalent amount and will reduce our financial obligations or otherwise improve our financial condition.
http://www.fanniemae.com/resources/file/ir/pd...q22014.pdf
On Fannie Mae's home page for investor relationship you see this box at the top.
http://www.fanniemae.com/portal/about-us/inve...index.html
In it it says:
We have been under conservatorship, with the Federal Housing Finance Agency acting as conservator, since Sept. 6, 2008. We also have entered into a senior preferred stock purchase agreement with the U.S. Department of the Treasury pursuant to which Treasury has committed to provide funding to us under specified circumstances. More information regarding the conservatorship and our agreement with Treasury is provided in our most recent Form 10-K, and may be supplemented by information in any subsequent Form 10-Qs, which are available under "SEC Filings."
I have been looking thru the 10-K's but have not found anything mentioning conservator ship or any explanation of an agreement that was made with Treasury.
Does anyone know where, or has anybody found where this info is located.
Here's a chart for all you so called gap traders...notice how the long wick on the 11th is not considered a gap...
Mortgage Bond Chart...
I am not an expert in charts. But with my limited knowledge, I assume FNMA is not a normal stock to depend on charts completely.
Appreciate your analysis and time but IF we do get some amazing news this week... Charts /analysis will be irrelevant... Hoping for the best for longs..
GLTA
$$$$$FNMA$$$$$
This is a great concern I have at this point regarding FNMA. I am not an expert. Please don't get me wrong. I am not being negative or postive but giving you a dose of reality as I see it for what it is worth. Here is a chart of FNMA during a correction in late 2007 - early 2008. I believe history is repeating. You can clearly see the dome pattern in effect with volume forming a saucer shape and price a dome. The 50day MA has fallen below the 200day MA. Conditions are almost similar. Your thoughts.
Thank you...
Right.. Kingboy, when you take your money out of the market, you were making a smart investing move. But when others decided to take a risky position and stay long, they are greedy, eh? Longs are ready for big upsides, and big downsides - this is OTC after all.
Somehow you seem to have mastered the knack of crawling out from under a rock every time you sense others with more fortitude looking to be in a good position. Pretty sad...
Gaps and Gap Analysis
Have you ever wondered what causes gaps in price charts and what they mean? Well, you've come to the right place. Just in case, a gap is an area on a price chart in which there were no trades. Normally this occurs between the close of the market on one day and the next day's open. Lot's of things can cause this, such as an earnings report coming out after the stock market has closed for the day. If the earnings were significantly higher than expected, many investors might place buy orders for the next day. This could result in the price opening higher than the previous day's close. If the trading that day continues to trade above that point, a gap will exist in the price chart. Gaps can offer evidence that something important has happened to the fundamentals or the psychology of the crowd that accompanies this market movement. Before we get into the different types of gaps, here is a chart showing a gap so you will know what we are talking about.
Gaps appear more frequently on daily charts, where every day is an opportunity to create an opening gap. Gaps on weekly or monthly charts are fairly rare: the gap would have to occur between Friday's close and Monday's open for weekly charts and between the last day of the month's close and the first day of the next month's for the monthly charts. Gaps can be subdivided into four basic categories: Common, Breakaway, Runaway, and Exhaustion.
Common Gaps
Sometimes referred to as a trading gap or an area gap, the common gap is usually uneventful. In fact, they can be caused by a stock going ex-dividend when the trading volume is low. These gaps are common (get it?) and usually get filled fairly quickly. ”Getting filled” means that the price action at a later time (few days to a few weeks) usually retraces at the least to the last day before the gap. This is also known as closing the gap. Here is a chart of two common gaps that have been filled. Notice that after the gap the prices have come down to at least the beginning of the gap? That is called closing or filling the gap.
A common gap usually appears in a trading range or congestion area, and reinforces the apparent lack of interest in the stock at that time. Many times this is further exacerbated by low trading volume. Being aware of these types of gaps is good, but doubtful that they will produce a trading opportunities.
Breakaway Gaps
Breakaway gaps are the exciting ones. They occur when the price action is breaking out of their trading range or congestion area. To understand gaps, one has to understand the nature of congestion areas in the market. A congestion area is just a price range in which the market has traded for some period of time, usually a few weeks or so. The area near the top of the congestion area is usually resistance when approached from below. Likewise, the area near the bottom of the congestion area is support when approached from above. To break out of these areas requires market enthusiasm and, either, many more buyers than sellers for upside breakouts or more sellers than buyers for downside breakouts.
Volume will (should) pick up significantly, for not only the increased enthusiasm, but many are holding positions on the wrong side of the breakout and need to cover or sell them. It is better if the volume does not happen until the gap occurs. This means that the new change in market direction has a chance of continuing. The point of breakout now becomes the new support (if an upside breakout) or resistance (if a downside breakout). Don't fall into the trap of thinking this type of gap, if associated with good volume, will be filled soon. It might take a long time. Go with the fact that a new trend in the direction of the stock has taken place, and trade accordingly. Notice in the chart below how prices spent over 2 months without going lower than about 41. When they did, it was with increased volume and a downward breakaway gap.
A good confirmation for trading gaps is if they are associated with classic chart patterns. For example, if an ascending triangle suddenly has a breakout gap to the upside, this can be a much better trade than a breakaway gap without a good chart pattern associated with it. The chart below shows the normally bullish ascending triangle (flat top and rising, lower trend line) with a breakaway gap to the upside, as you would expect with an ascending triangle.
Runaway Gaps
Runaway gaps are also called measuring gaps, and are best described as gaps that are caused by increased interest in the stock. For runaway gaps to the upside, it usually represents traders who did not get in during the initial move of the up trend and while waiting for a retracement in price, decided it was not going to happen. Increased buying interest happens all of a sudden, and the price gaps above the previous day's close. This type of runaway gap represents an almost panic state in traders. Also, a good uptrend can have runaway gaps caused by significant news events that cause new interest in the stock. In the chart below, note the significant increase in volume during and after the runaway gap.
Runaway gaps can also happen in downtrends. This usually represents increased liquidation of that stock by traders and buyers who are standing on the sidelines. These can become very serious as those who are holding onto the stock will eventually panic and sell – but sell to whom? The price has to continue to drop and gap down to find buyers. Not a good situation.
The term measuring gap is also used for runaway gaps. This is an interpretation that is hard to find examples for, but it is a way of helping one decide how much longer a trend will last. The theory is that the measuring gap will occur in the middle of, or half way through, the move.
Sometimes, the futures market will have runaway gaps that are caused by trading limits imposed by the exchanges. Getting caught on the wrong side of the trend when you have these limit moves in futures can be horrifying. The good news is that you can also be on the right side of them. These are not common occurrences in the futures market despite all the wrong information being touted by those who do not understand it, and are only repeating something they read from an uninformed reporter.
Exhaustion Gaps
Exhaustion gaps are those that happen near the end of a good up- or downtrend. They are many times the first signal of the end of that move. They are identified by high volume and large price difference between the previous day's close and the new opening price. They can easily be mistaken for runaway gaps if one does not notice the exceptionally high volume.
It is almost a state of panic if the gap appears during a long down move where pessimism has set in. Selling all positions to liquidate holdings in the market is not uncommon. Exhaustion gaps are quickly filled as prices reverse their trend. Likewise, if they happen during a bull move, some bullish euphoria overcomes trades, and buyers cannot get enough of that stock. The prices gap up with huge volume; then, there is great profit taking and the demand for the stock totally dries up. Prices drop, and a significant change in trend occurs. Exhaustion gaps are probably the easiest to trade and profit from. In the chart, notice that there was one more day of trading to the upside before the stock plunged. The high volume was the giveaway that this was going to be, either, an exhaustion gap or a runaway gap. Because of the size of the gap and the near doubling of volume, an exhaustion gap was in the making here.
Conclusion
There is an old saying that the market abhors a vacuum and all gaps will be filled. While this may have some merit for common and exhaustion gaps, holding positions waiting for breakout or runaway gaps to be filled can be devastating to your portfolio. Likewise, waiting to get on-board a trend by waiting for prices to fill a gap can cause you to miss the big move. Gaps are a significant technical development in price action and chart analysis, and should not be ignored. Japanese candlestick analysis is filled with patterns that rely on gaps to fulfill their objectives.
That's a keeper!
Quote:
Well you know how it doesn't mean it will, but it means it might, but you never know if it does or not unless it does cause you know it could unless it doesn't and then you will see cause if it does you will never know when it won't and it always will cause it will and you know it will cause it, well just cause like I said its just cause.
That should about clear it all up and you can keep your doctor if you want to.
What it means for Pershing Square to Voluntarily dismiss lawsuit in Lamberth's court===from Yahoo MB
Pershing Square has two active lawsuits - one in Lamberth and the other in Sweeney's court. Recently, the government filed a motion with Sweeney to force a decision 1) Stay the case before Sweeney or 2) Dismiss due to overlaps with the case in Lamberth's court. The 3rd option available to Sweeney was to Deny the motion to stay, but still with risk of government filing for dismissal. What nobody expected was a masterful nuclear-move by Pershing Square to voluntarily dismiss the lawsuit before Lamberth. In this game of Chess, Pershing Square has sacrificed a Knight to announce a Check Mate. No lawsuit in Lamberth's court = No case for government's Motion to Stay. The end result is the continuation of Discovery as ordered by Sweeney. This is very good news for the shareholders as the Sweeney case is the flagship lawsuit with highest win potential. This case is also feared the most by those afraid of the uncovering of their thievery - not just from shareholders, but from the tax payers and investors worldwide. Congratulations to Pershing and the shareholders.
The problem is that I don't know what the time frame is going to be for this downward correction to complete. I just try to paint the best predictive picture I can at this time with the info available. As far as the volume is concerned you can see that over the past few weeks the volume has been trending down eveytime the price has gone up and then the volume shoots up with every downward correction. So the pattern is materializing. Looking at the chart I would say that we could get a big correction this week. "The "Ackman /Commons” withdrawal of their injunction could be the catalyst.
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