Mark Down on Bad News

Volume Spread Analysis Glossary

A professional tactic in which the market-maker uses bad news as a pretext to rapidly mark prices down at the open, manufacturing panic so that weak holders sell into the decline and short sellers pile in on the momentum. The market-maker quietly absorbs all this supply, then stops supporting the move; the price recovers, trapping the shorts who must cover (buy) and amplifying the upward reversal. This is the core reason bad news at market bottoms is bullish in VSA—it is the trigger that transfers stock from weak to strong holders.

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