Megaphone◐ Heuristic
◆ The PatternDiverging trendlines — expanding volatility, increasing disagreement
The Broadening Formation (megaphone) has diverging trendlines — higher highs and lower lows. Volatility and disagreement are increasing. It often appears at major market tops and is one of the most difficult patterns to trade.
No clean measured move — trade the swings or wait for breakout
Each swing is larger than the last, swinging buyers and sellers into increasingly extreme positions.
// Broadening Formation — diverging trendlines
Key insight: Broadening formations reflect emotional extremes — they often appear during periods of uncertainty (elections, crises). The expanding range shows the market can't find consensus.
Pattern bridge: Expanding volatility — the market can’t agree on a price. In statistics, increasing variance signals instability.