Receding volatility sets the stage for the next explosive move, while participants remain evenly poised.

Analysis of CoFo Scout

The volatility coil tightening. Market participants lacking conviction to decisively advocate for either side and catalyze a directional impulse.

Scout indicators weakening across both buy and sell-side. Fragmentation reaching new extremes.

Only faint global short signals persist. This broad waning of directional signals further corroborates the cyclical volatility drain - harbinger of an imminent surge.

However, the volatility downswing doesn't inevitably trigger an immediate eruption. Upcoming weekends reducing liquidity could enable either bulls or bears to exploit the thinner conditions with less effort.

Who holds the edge? Look to the re-emergence of strength on local/swing timeframes to discern which side gains the upper hand.