Quote from: arepo on January 03, 2014, 12:17:12 AM

Quote from: T.Stuart on January 03, 2014, 12:08:34 AM

So as the energy wears out we look at volume; if it is weak we predict the price will go down - is that it in a nutshell or have I got it wrong?

nope. the entire point is that the weak volume in this case has nothing to do with any underlying trends. the weak volume is because we are about halfway through the oscillations caused by the large-volume price movement from $1200-$750, and we are very close to the equilibrium price, analogous to the zero-potential energy point in a physical oscillator.

then again, i'm sure some here will disagree. i like to apply physical models in my analysis, but a more well-accepted interpretation is that we are entering a sustained period of low-volume consolidation as the market begins to "forget" about the November-December volatility, and decide on a new trend. this kind of quiet occurs after all large price movements.

--arepo

Thanks very much for the explanation.