Hey its been a while, I took a little break and starting to get back into the game again. Anyways, MentalMidget and I were chittychatting and we were talking about charts and some stuff we hear every time. One of the most ambiguous words I hate is the word “consolidation”. You hear it all the time. The reason I hate this term is because people resign to one thought. Always!
When they see consolidation. When they talk about consoliation. There is only 1 and only 1 thought in their minds.
“the market is still trying to make up its mind”
How incredibly inaccurate!! How incredibly useless assessment!!
What it does is leave you to resign and say you don’t know what will happen. One suggestion. Get rid of that term from your mind other than to describe the candles bunching up in a same price range. Nothing more.
If there is something you can gain from “consolidation”, you should determine 1 of 2 things. Am I accumulating or distributing?
I totally hate that word especially when people make it a reason to stop thinking. They wait for the “market to decide” and when it does their analysis is after the move is already done. Oh it moved because we had negative/positive divergence. But the determination is after the fact. Useless to you because the move already happened.
Consolidation is NOT the market “trying to decide”. The market already decided!!
If you noticed, each example of consolidation, they are sites of accumulation or distribution. The momentum was already indicating the direction the market would move prior to when the “market decided” to move. And where did each accumulation and distribution go to? If you really want to know. If you really do! Go read my blog entry on accumulation and distribution. No. I’m not here to hold your hand. Figure it out. Everything is so basic. If you have problems putting it together. Get out of your way. The chart above shows how it works.
When you talk to your-self, talk to your-self in a manner that empowers you to make a decision.
Sorry for the spelling mistakes. Guess I was having issues with my “d” key and didn’t notice.