hard · Volume Price Analysis
A trader observes a 'Short Squeeze' signature: a wide-spread up candle with ultra-high volume immediately following a price waterfall.
Is this a reliable signal for a sustained bull trend?
- Yes; ultra-high volume on a wide-spread up candle is the definition of Bullish Validation and signals an immediate markup phase.
- Yes; a short squeeze is the Wyckoff event known as 'Jumping the Creek' and marks the end of the distribution phase.
- No; it is often a mechanical event of forced liquidation by shorts rather than sustained insider buying, and the price often settles back into accumulation afterward.
- No; a short squeeze must occur on low volume to be valid, otherwise it is just a 'trap up' move.
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