The thick red lines are the high and low from 2012. The thinner red line is the year-to-date high and low for 2013. The red lines, along with the longer blue lines may give clues of the market long to medium term trend.
The blue lines are in between structure levels and can give clues towards the markets immediate to medium term trend.
At either lines there seems to always be a reaction. The strength and limits of the reaction is limited to the battle between buyers and sellers and alignment of indicators can give clues to its impact.
On the chart, I have the 21 period EMA. This is one of few indicators I use. It is an excellent tool, especially on higher time lines, to aid price action reading.