Meaning – A market that is believed to have the potential to make a strong move in one direction after being pushed in the opposite direction.
Coiled markets often arise when the market has been held down artificially. 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. This happens in commodities markets, such as gold and silver.