hard · Volume Price Analysis
A trader sees three candidate 'selling climax' bars over four weeks of a decline, each a wide down bar on rising volume. The first has the widest spread and highest volume but closes on its low; the second is narrower on slightly lower volume closing mid-range; the third is the narrowest on the LOWEST volume of the three, closing near its high.
In Coulling's exhaustion logic, which sequence best signals that the trend's selling pressure is genuinely drying up?
- The first bar alone, because the absolute peak in volume and spread is by definition the moment of capitulation and exhaustion
- The progression itself — declining volume and narrowing spreads with improving closes across the three bars — because diminishing effort to push price lower is the true sign supply is exhausting
- The second bar, because a mid-range close on still-elevated volume is the textbook single signature of a completed selling climax
- The third bar in isolation, since the highest close is all that matters and earlier bars are irrelevant once a higher close appears
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