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*****Generally tests are designed to show ones strengths and weaknesses on a subject. In trading, we use the term "test" for the same reason. Tests are when a previously hit price point or region is once again visited by the market. If the price can hold, it's considered strong but when it fails to hold then weakness is revealed.
Tests occur most often when uncertainty in the direction of the markets is present. If the same region is tested over and over again, it develops more strength to resist further attack. When test areas break, the action tends to be accelerated resulting in a bigger gain or loss. So never discount the chart showing a seeming boring sideways action.
Happy Trading, Living and Dancing
Anni
The Daily Pick - $DJIA $SPX $NDX
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