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Old 05-08-2007, 12:32 AM
weiwei weiwei is offline
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Re: Intrinsic Reasons for Support and Resistance changing roles

It is just matter of $$$$, and the winner defending their investment.

Look at this pic, each arrows is 700+ ES cars on that time interval. With that many sellers to short at 11220 area, it takes a lot of buying powers to over come that area.

so what happen when buyers and sellers dual out again at that area. Only one side will win. Either seller able to cap it or buyer able to break out it. The winning side must out power the other side. Simple as that.

So if buyer is able to break out of that resistance. which means a lot of $$$$$. they sure will defend it when it gets challenged again, so they do not lose money on their position. Thus Resistance become Support or vise versa.

It is the big boys who can muscle the market that matter. They are the one who created S/R. So they are the one who will react to those S/R, if that is where they conduct their business at.


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