Hi folks:
Still schlepping my way forward in this terrific thread. It pains me to see it withering on the vine at the most recent page, knowing that by the time I do finally catch-up, it will or may be over (my life story in a nutshell).
With an eye towards hopefully preventing that, I will throw out another question for Tess, apologies in advance if already covered in the great interim unread. But at least topical (espero tan).
Consolidation/base vs. quick turnaround. The question is which forms better/stronger S/R? It is my (current
) position that when price rises or falls to a certain level but then quickly retreats or reverses in the other direction without spending much time at that level, it represents the greater imbalance between between supply and demand. One side was completely and quickly overwhelmed by the other. Whereas a consolidation or base formation shows a condition nearer actual balance between buyers and sellers over a period of time. Thus, a S/R line drawn at a one- or two-candle peak/trough (like a spike ending in a doji, or a two-candle piercing pattern that reverses price direction) shows a stronger level of demand/supply than consolidation pattern does. At least for the first visit back to that level.
Here is a picture that will probably better articulate what I cannot, showing one of each.
Is this counterintuitive? My logic faulty?