Change happens - watch for it!

Gaps occur frequently, noticeably, and unfortunately, rarely are understood. There are three types of gaps: breakaway, runaway, and exhaustion. I will save for another time a definition of each type of gap and an explanation of methods to deploy gaps in your analysis. Perhaps needless to say, however, gaps represent an obvious change in dynamics.

For example, Starbucks/SBUX. I fretted whether this recent activity would prove to be a base or top. Now, with today's possible breakaway gap beneath the 200-day sma, it seems to be a top. (Final critical support lies at $49-48.) The close for today and tomorrow (weekly basis) are important.

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Contrary to SBUX, however, is Google/GOOG. I previously have sung hosannas to it, perhaps ad nauseum. But its dynamics changed abruptly two days ago (Tuesday) when the shares enjoyed a minor, but important gap above its 50 day sma. This particular change is a bullish augury. (Recall the caveat expressed in the "Raindrops" post.)

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More anon re Google/GOOG...