Looking back to a post on Crude Oil in July of 07, we saw this market climb above a MOB level that it WAS using as resistance. Once a MOB is violated, in that case, to the top side, it no longer acts as resistance...it becomes support. I see this happen time and time again. It is for this reason that I always encourage people NOT to remove MOBs from the chart, just because the market moved past that price level. Most of the time, the next retracement in that market comes back to retest that same price level of the last MOB.
The recent Crude Oil chart is a gleaming example of this principle, as it has tested it's recent MOB level no fewer than 3 times. It climbed above this MOB in October of last year. It turned around and tested it immediately, then again in December, and still again last week. This $84 to $86 range continues to be where we find support in this market.
The recent post on Gold would be another example. We continue to hold above the MOB level we broke back in early January, and we used it as support last week. All this is to remind everyone that MOB stands for Make Or Break. The focus is usually on the MAKE portion of the name, but let's not forget how useful this tool can be, even when it is BROKEN. It's not often you get a lot of good use out of a tool once it's broken, but this happens to be one of those times.
More examples:
Nate McCartney
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