Now that the market has swallowed all the news from the Bear Stearns debacle, what’s next? The volatility has been so high for the past few weeks that most have forgotten that there are other players in the market that are just as important. With the eventual JPMorgan Chase’s take-over of Bear Stearns, it seems the deal between Yahoo and Microsoft has been pushed in the back burner. But it is the right place for the swing trader to ignore the stocks that are affected by the news and on to others that are technically more attractive in taking a position.

Figure 1

Looking at Figure 1, since Microsoft’s bid for Yahoo, the prices have been lingering near the top of the gap while investors are waiting for an ending to this story. At the moment, most investors are betting that MSFT will come out with another bid. On the technical scene, this seems unlikely; prices are below its high and below the gap, giving it a good chance of being pushed down or kept down by bigger and smarter money? From the technical standpoint, the chart indicates a confirmation of a price breakdown.

There is one caveat: this stock technically has a good chance of filling the gap (most gaps do fill, especially it’s inflated for no reason). If there is a chance MSFT comes with another bid, all bets are off. But if the general market continues to erode, then chances are the gap will be filled with prices following the market down. This has a higher percentage of succeeding than the other way.