The 4 Consolidation – Questions

The last bottom was this.

Once you have the consolidation mean figured, you can start gauging better what is happening.

  1. Where is oversold? Where is overbought?

Does price get overbought / oversold?

2. Was there a break out or a break-out-failure?

3. If there was a break, has there been a back test? Was it successful?

(you get to label up the arrows)

Look at how the consolidation mean migrated lower and started providing support before the long trip up.

Now look at how during the Wave 3 up price never got oversold.

The consolidation mean migrated higher to provide a resistance.

4. Has the consolidation mean migrated up and started acting as resistance or has it migrated down and started acting as support?

During the sideways motion the consolidation mean migrated lower until

  • the market did not reach oversold any more (but it did touch overbought – your hint)
  • support was built around it for the next leg up

Your questions are the same as always.

  1. Where is oversold? Where is overbought?

2. Was there a break out or a break-failure?

3. If there was a break, has there been a back test?

4. Has the consolidation mean migrated up and started acting as resistance or has it migrated down and started acting as support?

Choppiness – Mac is available if you care to make a donation of your choice.

Contact me, Macdulio@yahoo.com