What’s the Chance the Market Closes Higher After a Gap Up?

ByOddmund Groette What is the accuracy - Win rate - success rate of

In the fast-paced world of trading, a gap up—when a market opens higher than the previous day’s close—can spark excitement and speculation. But what are the odds that the market will sustain that momentum and close above its opening price? We dug into the data to find out.

Our backtest analyzed historical gap-up days for the S&P 500, specifically where the market opened at least 0.1% higher than the prior day’s close. The results? On average, there’s a 53% chance the market closes higher than its open, and a 47% chance it closes lower.

This near coin-flip outcome highlights the unpredictability of gap-up days. While the slight edge (53%) suggests a modest bullish bias, it’s not a slam dunk. Traders might see this as a signal to proceed with caution, as external factors—like news, volume, or broader market trends—can easily sway the day’s direction.

So, next time you spot a gap up, temper your optimism with a dose of realism. The data says you’re slightly more likely to see green by the close, but the market loves to keep us guessing.

I’ve got an Msc from Heriot-Watt University, Edinburgh (1996), in addition a to a business administration degree the Norwegian School of Management (BI – 1994). Did my mandatory military service in between.

After university, I worked two years as an auditor (1996-1998).

I co-founded Aksjeforum.com in 1998/99 - one of the first websites about trading and investing in Norway. It was later acquired by Digi.no in 2001.

I have written 4 books about trading (in Norwegian). One of them has sold 30,000 copies, a record for a financial book in Norway.

From 2001 until 2018 full-time independent prop trader (Series 7 in 2001) and investor.

2018-today: Investor, writer, analyst.

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