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I have a question for you regarding gap fills. Currently on the YM's we have four gaps to fill to the downside. The first gap at the 12215 level was created at contract rollover. Because of this is this a valid gap to fill? I appreciate your sage advice.

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In my opinion, inter-contract gaps are NOT valid. On the YM, there is usually a 15 point premium to cash at rollover on the new contract and close to zero on the expiring contract.

It is normally easy enough to look at just the new contract and calculate the gaps on that. Ignore the continuous contract for gap calculations. That's my opinion. I hope that helps!

It does. Also, it brings the Fibs into sync since a 50% retrace from this last leg up will fill the breakaway gap circa 12460. Many thanks.

You're very welcome.

The 15 point premium that I mentioned (not sure how accurate that is) will change as interest rates change. The higher the interest rates the higher the premium. This is known as the cost-of-carry. Which simply put is as follows:

To control $50,000 worth of stock (via an index) only costs you $2,000 of margin (using the future - in this case the YM). So the premium represents the cost of borrowing the difference ($48,000) over the period (3 months) at prevailing interest rates (about 5.25%). The numbers are very rough but should illustrate the point.