Consolidations Before Breakouts

This is the chart of the S&P 500 CBOE Vix index that is graphed on the weekly time frame and the goal of this post is to exhibit each of the breakouts that occur after a narrow range and tightly congested weekly candlestick. This case in point shows how the candlesticks condense or contract before breaking out and reaching a relative high. In each of the examples on the chart the highs that I point out have a white arrow above them and the lows are contained within the small candlestick in the ellipsis. For most of the "bullish move origins" there is a a small real body and a week above and a week below the tight formation of the candlestick has a yellow arrow below it. This psychological event noted by a yellow arrow points up, generally it takes a long time for the price to rocket higher after a breakout but on average its between 2 to 3 weeks. The key ingredient is the tightness of the candlestick formation when it is poised to break out. Although this case is more subjective it does point out six swings that have a pattern that repeats itself The other photos are examples of the high-wave and other forms of doji candlestick formation.