Idea Ripper // ArchiveCards: 1555 [Live] | Updated: 2026-10-14
Card #c1288IR // #c1288Synthesis

"When a market enters a tight trading range after a significant move and volatility begins to contract sharply, it tells you that the order imbalance in the market has been rectified, and a more stable short- term equilibrium has been found."

— In our words · Source: Trade Outside the Box (Brent Donnelly)

[Use when]

A trend is still going but the swings around it have gone quiet.

[Why it matters]

Even if prices keep inching up, shrinking swings signal that the forced buying or selling behind the move is done. Donnelly reads it as a clue that the trend is nearly exhausted.

Filed under situations:When your picture of things might be wrongWhen you must decide and the facts aren’t in

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