Supply Entering the Market

Volume Spread Analysis Glossary

A narrow-spread up-bar on high volume, ideally into new high ground, signalling the end of a rising market. The narrow spread shows that market-makers are capping the upside by selling into public buying—if they were bullish, they would have allowed the price to run on that volume. The close may be on the high, which actually makes the signal more significant because it shows professionals selling with maximum efficiency. The pattern is only valid after a substantial up-move; if an old top exists to the left at the same level, the same bar may instead be absorption volume (strength)—the distinction is critical.

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