03/10/2013 Mousetrap

[Harry]

Hi Tim,

When you get a chance, can you elaborate on you definition of the buy/sell gaps that prohibit a trade in your model? Meaning, is it fixed on a %, $ amount or simply a discretionary call?

When their is both a buy & sell signal, if both gap away, are both gaps analyzed as a whole or would a single gap negate a transaction?

Thanks,
Harry

[Timothy Clontz]

If I'm trading one stock for another and they gap together, I'll still trade.

In the case of TTM, it will be against the dollar, since it's going to cash -- which is unusual for the model.

But if the sell gaps down and the buy gaps up, I don't want to chase the trade. I'll just recalculate for another day.