Kardec TraderFutures Trader. Creator of The Midas Touch. Mentor

Traders MUST Know These SECRETS🚨

26 Mar 2026 · 1 min

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In this segment, the speaker explains why certain breakout patterns persist over long periods, attributing them to the fundamental law of supply and demand. He describes a typical market structure where a stock makes an upward move (a leg up), consolidates, and then initiates another leg up, emphasizing this as a structural tendency. The concept of a "catalyst gap" is introduced, explained as a price gap caused by a surprise event—such as unexpectedly strong earnings or revised guidance—that forces institutions and analysts to reassess the stock’s valuation. This reassessment can shift a stock from being perceived as overvalued to undervalued, creating competition among market participants and driving rapid price changes.

Chapters

Just to give you an example why our breakouts are there in 100 years plus. Because, you know, it's the natural law of supply and demand. That's how it materializes. Stocks move, you know, they perform a leg up, then they consolidate in different ways, and then a new leg up. It's a structural tendency of the market. You know, why is Catalyst Gap evident through many years? It's based on a surprise, and surprise is a behavioral tendency in the market. You get a stock maybe $30 and it might be undervalued— sorry, overvalued actually— the previous day, and then some game-changing news hits, right? It can be explosive earnings with a surprise and, you know, increased guidance. So what does it do, right? Chrome seems institutions and analysts to run the gender models and reevaluate the stock. And so the same stock could be that it was overvalued at 30, could be undervalued at 50. And that creates competition. And that's why you get this character change.