For over two weeks now we've watched the price attempt to breakout from the initial 50% consolidation after the deep selloff, but none of the rallies in either direction have broken decisively away, so the price continues to consolidate around the original mean. I've left the many horizontal support/resistance levels off this chart (you can see them easily on my other charts), as I wanted to show only how this formation is gravitationally anchored to the 50% retracement.
It shouldn't be surprising that when both bears and bulls are less-than-certain about their prospects, the safe place to return to is the 50% retracement. This is what results in the gradually diminishing swings.
Yes, this is terribly sideways, and would seem to indicate nothing at all for future movements - but a study of every other selloff and consolidation since november shows that when the consolidation bias is level/ascending, a bullish rise comes next. When the consolidation bias is descending, a selloff is imminent.
Thus, while I can't say just when this narrowing wedge will finally breakout, the strong supports and horizontal bias of this floor is inherently a bullish sign.
It shouldn't be surprising that when both bears and bulls are less-than-certain about their prospects, the safe place to return to is the 50% retracement. This is what results in the gradually diminishing swings.
Yes, this is terribly sideways, and would seem to indicate nothing at all for future movements - but a study of every other selloff and consolidation since november shows that when the consolidation bias is level/ascending, a bullish rise comes next. When the consolidation bias is descending, a selloff is imminent.
Thus, while I can't say just when this narrowing wedge will finally breakout, the strong supports and horizontal bias of this floor is inherently a bullish sign.