How to identify on previous day that next day is a gap up/down?

Well !! this is a million dollar question but most traders do often seek the answer for this and the following notes are my thoughts on same

• A gap up/down typically means heavy bullishness/bearishness during opening of market that could be a continuation of the previous days trend or it could also be some overnight events that market gets excited upon. The second reason is outside our control and need be handled based on your judgment of situation at hand and your view on market knowing or without knowing about it.

• Gap-ups/down benefits you differently depending on whether you are intraday player or carrying forward a short swing trade or a positional trader.

• Make note that a gap-up/down does not mean just doing a trading for the day but they are supports/resistance for future days too.

• For intraday traders gap-ups/Down most times give very less opportunity as trending most times end after a gap-up/down and it remains sideways giving less opportunity for directional trades.

• Gap-ups could be "break away" getting outside of a consolidation phase or a "continuation" gap u could hold on or it could be "exhaustion gap" that could trap you or tells you to short a gap-up.

• As technical analyst we could try get clues on possible gap-up/down using a combination of the price, volumes, momentum, trend, volatility and then optimize our trading rules around it.

• Does the previous day lower timeframe candlestick patterns show bullishness/bearishness ?
• Does the previous day trendlines show any immediate resistances/support breaches?
• Do they show any breakout /consolidation patterns like flag/triangle/rectangle or a change in polarity?
• Is the momentum taking support or reverted or resisting or breaching the key levels?
• Do we have any divergences on momentum? How strong are they?
• Do u see any crossover of ADX? do u have it rising up/down? Do we have a ADX indicator bend seen?
• How good is the volumes traded previous day especially during second half? is it above 20 simple moving average?
• Do we have a volatility squeeze for a potential breakout?
• where are the highest open interest writing and supports? How close/far are last traded price from those?
• What was futures open interest buildup indicting? is it long-unwinding or short covering or long/short? Markets may have reversed end of previous day and there could be panic short covering/longunwinding moves?
• Monitor VIX and see if it has been rising or falling previous days or hours? when the VIX is rising most times it brings the market down.
• FII buying and selling spree can give clues as to if they are likely to continue do same or not?
• SGX opening green could bring positive or negative moves here too
• US/Europe markets performance also indices could being positive or negative moves here too
• Dollar/Euro /Crude Index movements overnight has impact on our market next day?

• As briefed earlier identifying gaps before hand is not just enough, knowing how to play the gaps is what matters. We could be doing both directional or non directional trades even with gap-up/downs as well. Having a trading plan as per your previous day view is what is important. Markets are random and our analysis may not work at times and what really matters is what is your plan B? and not just your plan A.