The fundamental picture is constantly evolving to reflect new information. Just as the fundamentals experience occasional adjustments impacting the expectations of the asset, so too do technical analysis and market timing. This is most often reflected in Sequential by a process known as Recycling.
Recycling occurs when a Countdown is interrupted by a subsequent Setup of certain criteria in the same direction. Recycling suggests that the new trend is strong enough to weaken the impact of a confirmed Countdown series and resets the process.
Two situations can cause the Sequential reading to Recycle. Either the overlapping Setup continues beyond its minimum requirement of 9 consecutive closes greater than/less than the close four bars earlier, reaching a count of 22. Alternatively, the size of the more recent Setup, as measured by the difference between the highest true high and lowest true low of the series, is between 100% – 200% of the size of the prior Setup.