Consolidation is very important for finding new "footing".
Remember when you were a kid ... you'd climb to the very tip top of that tree in the backyard and then once up there you'd look down and say, "Oh no, I don't think I'll be able to climb back down." All of a sudden the footholds you'd used to make your way to the top were much too far below you to make for an easy way back down. Your only options were to fall all the way back down to the bottom or call the fireman. Well, in the stock market world, there are no firemen to come to our rescue. This is why we must consolidate, so that we don't fall all the way back down to the bottom. Think of it like a mountain climber. He hammers a peg above him (resistance), then climbs above it, then stands on that peg that is now below him for a while (support) as he hammers in a new peg above him. This is exactly how we want our ascent to unfold (at least if we're long).
This really is the easiest way I can think of to explain it to someone who isn't a chartist.
News 
Market Data 
Discover 
AI
