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I found this post from Janny, where she mentions the exclusion of companies involved in a buyout.

oh, thanks so much for finding that post--I did a board search for Janny's Gap theory (or as Jeanwa reminded us, Janny's Gap Fact), and came up with zilch.

Yes, I am well aware of the IBM/Sun acquisition talks and that the apparent falling-through of the deal is what caused the gap down. I was not aware however of Janny's caveat about buyouts. Thanks for posting that link. In any case, I believe the gap target is useful in putting a number (i.e., quantifying) the pyschological aspect of market reaction to news causing a move in stock price. Sort of like fibonacci retracements--there's some psychology at work behind the moves that may never be fully explained. I still feel the Sun target price is valid as a potential buy-in point. Of course, that is jmho.

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