Chapter 7: How Past Support Becomes Future Resistance (and Vice Versa)
What we will cover in this chapter
- In simple terms, prices are always either trending or ranging. While trending phases tend to be exciting, it is worth spending time to consider what goes on to create the range and the effect this has on sentiment.
- Since ranges are boring relative to trending phases, expectations of breakout potential deteriorate the longer a market remains in the congestion area.
- Five emotions are commonly associated with every breakdown from a range. These are: fear, anger, self-recrimination, hope and shock.
- How past support becomes future resistance and vice versa.
FOR A MAJOR bull or bear market to develop there must be an imbalance between ...