Just as buying that creates a support level eventually runs out of money/conviction/time, so too with levels that have attracted sellers. Eventually they run out of stuff to sell and the ensuing move through what had been resistance can be dramatic.
From the Chicago Board of Trade (CME Group) via TradingView:
That area of congestion between the current price (red line) and the approximate resistance a bit above $7.00 (blue line) has to be cleared.
The key to this sort of set-up is patience. there is no reason to try to frontrun a breakout, that approach will lead to poverty and despair, though perhaps surprisingly, death by one's own hand is no more common than among the general public. From Donohoe's Magazine, June 1905:
pp. 501
"Many have sought to use the Board of Trade as a commercial Monte Carlo , and as a Monte Carlo it has used them, entailing the loss of fortune and honor, the destruction of home and happiness, the pangs of ruin and despair, with occasionally, as we have seen, the introduction of the red spectre of suicide. Once in a while comes the report of the discovery of the dead body of a trader or broker, the victim of his own hand, perhaps in some quiet spot in the parks; his brother brokers shake their heads, exchange reminiscences of him and comments on the cause of his downfall, and the affair soon becomes a dim memory. Some ruined members bring home more closely to their fellows the shadow of their doom, as instanced when an unfortunate man walked across the floor of 'change and shot himself in the screened- off washroom. It is only a year or so ago since a married member killed him- self at the door of the residence of a woman who had wrecked his fortune and domestic happiness . But probably the pro- portion of suicides on the board is not in excess of that in other speculative business; the average trader seems to be of tougher and more elastic stuff than the kind that seeks refuge in felo de se.
Some notable cases have occurred, pitiful and pathetic, though illustrating the folly and baseness of despair. In 1868, A. de Belloy, a Parisian gentleman, handsome and highly-cultured, appeared in Chicago and began to speculate on the board. He possessed some peculiar talents; as a skilful mesmerist he had given convincing exhibitions before the leading medical society of Philadelphia. In Chicago he attained much popularity and high social standing. He was, however, generally unsuccessful in his business deals, and was at length ruined in capital and credit by trade fluctuations caused by the Franco-Prussian war.
One day, his last dollar gone, De Belloy walked into Kirchoff's beer tunnel, then a favorite resort of traders, politely apologized to the bartender for the temporary inconvenience he was about to cause, and shot himself dead. When some members of the board brought the corpse home to the bereaved wife and infant son they found there was in their home scarce food enough for a single meal. A charitable lady kindly interested herself in the poor widow and helped keep the wolf from the door. One month later came a notification from the French government to its consul in Chicago, that, by the death of an elder brother, A. de Belloy had been left a fortune of $2,000,000 and the title of marquis. To both wealth and title the claim of the suicide's infant son was in due time fully proven, and in less than six months after the tragic passing of De Belloy his family were living in the elegant and aristocratic luxury which they enjoy to this day....
Sorry that's not the story I intended to use to make the point,
Here it is:
pp. 510
....Secretary George F. Stone , now in his twenty -first year of office , is a native of Newburyport, Mass . In 1873-4 he was president of the Boston Corn Exchange . He came West in 1876, and in the World's Fair year [1893] delivered the address of welcome to the congress of boards of trade of America. A genial, cultured, observant Easterner, he has this to say regarding the alleged crimson thread of suicide that runs through the history of the board: "There are less cases of suicide arising from depression among members of this board than in any other class. Their business experience is such that disaster does not discourage them. Changes in the market do not affect them so much as others ; by their habits of business they are fortified against adverse financial happenings. Men who are or- dinarily depressed and disheartened may in moments of weakness be led to self- destruction by violent changes in busi- ness affairs or in values; but the average board of trade man is of other metal ; he is hopeful and looks upon the bright side impulse is to consider that better times of things, and in case of disaster his first will come, and that 'to-morrow will be another day....'"
Well there you go. Trade away. But do keep tabs on the health of your brother, the Marquis.
679'6, down 3'0 (-0.44%) last.
Last referenced in 2020's "Understanding Commodity Financialization (and Why it Matters to Everyone)":
Trading commodities involves a high degree of risk, you will lose everything at least once.
That said, the “crimson thread of suicide”* that was alleged to run through the history of the Chicago Board of Trade was refuted by one of the longer-tenured Secretaries of the exchange:
"There are less cases of suicide arising among members of this board than in any other class."—George F. Stone, quoted in Donahoe's Magazine, Volume LIII, Jan. - Jun. 1905, pp. 510
On that reassuring note...
