Selling Climax

Volume Spread Analysis Glossary

An ultra-wide-spread down-bar (or sequence of 1–3 such bars) on exceptionally high volume—often the highest seen in months—closing on or near the highs (or at least in the middle), occurring after a bear market that has been running for weeks or months. It marks a full capitulation by weak holders during widespread panic and bad news, and signals a major bottom forming. However, immediate upward movement should not be expected; the professionals who absorbed the panic need weeks of accumulation, testing, and possibly a shake-out before the mark-up can begin. Historical examples include October 2008, March 2009, March 2020, and October 1987.

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