Love the occasional text messages from you all– yesterday a comment from an older client struck me with his limited analytic capacity as he wanted to challenge my use of the word “consolidation” describing the trade. Consolidation is a term in reference to the volatility during the day– The last two days of trade have had ranges of $.53+and $.42+ which are well below the ranges since the beginning of the month between $.60-$1.32+. Is this consolidation– yes — is the range greater than when prices were consolidating around $4.00 between $.15-$.30– yes. The key is the level the price is at compared to the recent history of trade. Another interesting comment that I received from a couple of readers and they were mentioning that consolidation would leave to another decline downward. I can not subscribe with that theory– periods of consolidation occurs to set up the next move whether it is up or down. The recent reversals downward may suggest a break down — but I would also submit that the general bias in this market remains bullish having reversed off of highs only to test support at major support ($6.40) only to fail and rebound to where we are.
Major Support:, $7.00-$6.855, $6.411-$6.392, $6.247-$6.278, $5.27-$5.199, $5.001, $4.40-$4.26, $4.187 Minor Support: $6.00, $5.063, $5.04, $4.88, $4.60-$4.557 Major Resistance: $8.47-$9.60
