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When the market opens, the S&P 500 (SPY) often reveals its hand within the first few minutes — if you know what to look for.
The opening gap tells you a lot about sentiment, momentum and how aggressive or defensive you need to be for the rest of the session.
If SPY gaps higher but quickly gives it all back, that’s a major red flag. It tells you there’s no real conviction behind the move, and the odds of a reversal or range-bound action go way up. But if the gap holds — even partially — that’s usually a good sign that buyers are in control and the structure is intact.
It doesn’t mean the day will be smooth. It just means the early setup has legs.
Why Gap Fills Matter
One of the biggest tells is whether or not SPY fully fills its opening gap. A full gap fill — especially one that happens fast — often shifts the tone entirely. What looked like a bullish start can quickly turn into a defensive, sideways or even bearish session.
On the other hand, if SPY opens higher and consolidates without giving it all back, that’s usually bullish. The more time it spends above the open, the more likely it is to grind higher or at least hold its gains.
Watch the Clock and the Spread
Right after the bell, spreads are wider and price action is chaotic. That’s normal. But once 15 to 30 minutes pass, things tend to settle. Spreads tighten, direction becomes clearer and the gap — whether it holds or fills — gives you a clearer read on sentiment.
The opening gap isn’t noise — it’s information. And if you know how to interpret it, you’re no longer reacting blindly. You’re reading the market in real time, and that’s an edge.
Kane Shieh
Kane Shieh Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. Did You Know This About the Markets?
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