Components
The Ichimoku Cloud is made up of five lines: the conversion line, base line, Leading Span 1, Leading Span 2, and the lagging span. The area between Leading Span 1 and Leading Span 2 is called the "cloud," and whether the price sits above or below the cloud is sometimes used as a guideline for judging the overall market bias.
How to Read It, and What to Watch Out For
Some view the price breaking above the cloud as a shift toward an upward bias, and breaking below it as a shift toward a downward bias, but the cloud is mechanically calculated from past price movement, and the price does not always react to it as expected. It is common to check it together with other elements, such as a crossover between the conversion line and base line.