Coiled Market

DEFINITION of 'Coiled Market'

A market that is believed to have the potential to make a strong move in one direction after being pushed in the opposite direction. The idea is that if a market should be headed in one direction based on its fundamentals but is pushed in the other direction, it will eventually make a strong move in the original fundamental direction. This coiled move will often be more substantial than what might have been the case if it had gone in the expected direction to begin with.

BREAKING DOWN 'Coiled Market'

Coiled markets often arise when the market has been held down artificially. This happens in commodities markets, such as gold and silver. Investors looking to capitalize on coiled markets will use both fundamental and technical analysis to identify markets or specific equities that exhibit the characteristics of a coiled market.

The origins of this term relate to the physics of a coiled spring: the more it is compressed, the greater the rebound will be.

RELATED TERMS
  1. Whipsaw

    A condition where a security's price heads in one direction, ...
  2. Divergence

    When the price of an asset and an indicator, index or other related ...
  3. Momentum

    The rate of acceleration of a security's price or volume. The ...
  4. Fundamentals

    The qualitative and quantitative information that contributes ...
  5. Moving Average Ribbon

    A technique used in technical analysis to identify changing trends. ...
  6. Direct Purchase Program

    A direct purchase program is a method by which individuals can ...
Related Articles
  1. Active Trading Fundamentals

    Technical Vs. Fundamental Investing - Friends Or Foes?

    Making money in the stock market has been likened to gambling by some, but experienced investors who do their homework usually profit by doing market analysis. However, even experienced investors ...
  2. Investing Basics

    What Are A Stock's "Fundamentals"?

    The investing world loves to talk about fundamentals, but do you know what it means?
  3. Active Trading Fundamentals

    Ways To Gauge The Market Open Direction

    Accurately predicting the stock market’s opening moves can be a useful tool. If your projection is accurate, you have opportunity to profit. Of course, the first step is to correctly gauge the ...
  4. Active Trading Fundamentals

    Reading And Adapting To Market Performance

    Performance that aligns with broad market direction exposes a major strategic weakness.
  5. Trading Strategies

    Technical Analysis: Fundamental Vs. Technical Analysis

    By Cory Janssen, Chad Langager and Casey MurphyTechnical analysis and fundamental analysis are the two main schools of thought in the financial markets. As we've mentioned, technical analysis ...
  6. Forex Education

    Forex Trading Rules: Trigger Fundamentally, Enter and Exit Technically

    by Boris Schlossberg and Kathy LienShould you trade based upon fundamentals or technicals? This is the $64 million question that traders have debated for decades and will probably continue to ...
  7. Active Trading

    Fundamental Analysis For Traders

    Find out how this method can be applied strategically to increase profit.
  8. Markets

    Fundamental Analysis: What Is It?

    By Ben McClureIn this section we are going to review the basics of fundamental analysis, examine how it can be broken down into quantitative and qualitative factors, introduce the subject of ...
  9. Forex

    Trigger Fundamentally, Enter and Exit Technically

    Use news and price action to determine entry or exit strategies with technical and fundamental analysis
  10. Forex Education

    Fundamental Analysis Vs. Technical Analysis

    Here we will cover the preliminary steps you need to take to find your footing in the FX market.
RELATED FAQS
  1. How is direct cost margin calculated?

    Find out how to calculate the direct cost margin, including how it is used in corporate finance as an indicator of operational ... Read Answer >>
  2. How does fundamental analysis differ from technical analysis?

    Learn about the differences between technical analysis and fundamental analysis, such as how these investment strategies ... Read Answer >>
  3. Is it better to use fundamental analysis, technical analysis or quantitative analysis ...

    Understand the difference between fundamental, technical and quantitative analysis, and how each measurement helps investors ... Read Answer >>
  4. How legitimate are companies that advertise debt consolidation for all my credit ...

    Learn about how fundamental analysis ratios can be combined with quantitative stock screening methods and how technical indicators ... Read Answer >>
  5. What is a direct rights offering?

    Discover what a direct rights offering is, what it means for shareholders who receive the offering, and the reasons a company ... Read Answer >>
  6. What is the difference between fundamental and technical analysis?

    These terms refer to two different stock-picking methodologies used for researching and forecasting the future growth trends ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center