Your horses body language can tell you so much if you just know what to look for. If he is always sleepy and not really blinking I would be worried that he isn't really thinking and that he is on "auto pilot". But it is good that he is keeping his ears moving and that he is focusing on you, how much of his attention is on you is what is really important. Change in direction is great, it gets him thinking and focusing, you could also try to add a few obstacles to his circle to get him really thinking about where he is putting his feet and helping his mind become engaged in the activity. I'd add a few ground poles here and there, maybe some pylons that he has to actively thinking about navigating his way through, even a tarp. Of course you don't want to introduce him to these objects for the first time with a rider, just incase he does react. But you could put him out on the circle riderless and ask him to navigate the course you have set up once he is ocmfortable with all the objects. This will also help bring his nose and head up because it is hard to navigate when it is almost touching the ground!!
And yes lateral flexion is where you get them to basically bring their nose around to touch your boot. It is very important to have consistant lateral flexion becaue that is the best way to stop a run away horse!! You disengage their hind end and they won't be able to run off on you. Sounds like you are doing all you need to be under saddle, but not letting him be the "driver" and by getting the results when you want them. Consistancy is the key :D
And I know all too well about not having good weather - booooo to the crappy year mother nature gave us :(
Keep up the good work with your boy! Sounds like he might just be getting anxious to move out and do "stuff" which is good, but you want him to be controled and focused :D
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