A green premarket is seductive. A red premarket is scary. Both of them lie to you about 30% of the time.
What a premarket gap is
The premarket gap is the percent change from yesterday's regular-session close to today's 9:30 AM open. Squintz computes it the moment the 9:30 minute bar prints and displays it as a badge on the signal card: green for positive gaps, red for negative, filled when the magnitude crosses 5%.
If a stock closed at $100 yesterday and opens at $108 today, you're looking at a +8% gap up. That's information. It's not a trade.
What big gaps usually mean
A gap above 3% in premarket almost always has a reason. Earnings. FDA news. A secondary. An analyst upgrade dropped after hours. Sometimes it's a block-buyer accumulating in the thin tape for a thesis that'll show up next week.
The news is priced in by the time the regular session opens. Your job isn't to chase the gap. Your job is to read what the stock does with the gap in the first 30 minutes after 9:30.
Why Squintz won't trade premarket
Three real problems, stacked:
- Spreads are brutal. A 0.05% daytime spread can be 2% in premarket. You'd need a 4% move just to break even on round-trip friction.
- Volume is a mirage. A single large order can print what looks like a rally on 3K shares. There's no book depth to trust.
- PDT risk. Same-day roundtrips count toward the four-trades-per-week pattern day trader limit under $25k. Squintz's overnight-hold strategy avoids that entirely by design.
Gap-and-go vs. gap-and-fade
Here's the uncomfortable truth: in the first 15 minutes after 9:30, you cannot reliably tell a gap-and-go from a gap-and-fade. Both of them look like a gap. Both of them usually spike another 1–2% on the open. Only one of them keeps going.
The difference shows up in the next 15 minutes — in velocity, in VWAP reclaim, in whether large prints keep stacking the ask or start hitting the bid. That's exactly the window Squintz is measuring when the hunt scan fires.
How Squintz actually uses the gap
The gap is context, not trigger. It shows up on the signal card as a badge so you can read the setup faster:
- HC alert + big positive gap + holding above VWAP → the overnight thesis is confirming. High-quality shot.
- HC alert + negative gap → something surprised the market. Read carefully before committing.
- No HC alert + huge gap → no trade. The move is already priced; chasing is tomorrow's regret.
Stare at the gap. Don't chase it. Wait for the 9:30 window where Squintz actually has an edge.