Quote from: arepo on January 03, 2014, 12:02:02 AM

Quote from: T.Stuart on January 02, 2014, 11:02:54 PM

Am I understanding it correctly then by saying that as the oscillation fades you look to see where the next move will go, and that it is at this point that you consider volume?

EDIT: or do you mean that the direction should change once the oscillation fades?

not sure what you're getting at, but allow me to clarify.

we've been oscillating about a (moving) hidden price point since the crash, similarly to the way that a pendulum swings back and forth through a point of "zero potential energy". while the system has enough energy, it does not rest at this equilibrium point, but as the system loses energy, its movement strays less and less from this point until it comes to rest. the oscillations in price are running out of "energy" and we were seeing a low-volume consolidation around this equilibrium point. "energy" is proportional to volume in this model.

--arepo

OK that's understood. So what I mean is that the closer the swings get to the point (the less energy there is in the oscillation) is the closer we get to the market moving in the next price direction, is that right?