market tops and bottoms or consolidation

  1. 9,485 Posts.
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    Although it's not completely relevant if the overall market is going up or down for us to make money , it pays to know where the overall index is heading .

    This is where the confusion lies and especially in these consolidation phases .

    Rule of thumb is a consolidation phase [sideways pattern][or opposing sloping pattern] often is a continuation pattern and the market will keep heading the direction it was going before entering the consolidation .

    From when our market bottomed [asx200]in mid March its first major top was around 325 points , we then had a 16 day consolidation [downward sloping channel ] and another run up but this time only just 200 odd points .
    This tells us the market is weakish . After a very quick pull back we've entered into another consolidation phase . The interesting thing is the first one took 16 days to pan out and guess what ? tomorrow is also the 16th day of this consolidation .
    Do I think we're still going up ?
    Only if we break above the top trend line . So stay tuned I guess .
    night all . ge
 
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