hard · Volume Price Analysis
A market makes a buying-climax top on record volume, sells off, then rallies back to make a SECOND high that slightly EXCEEDS the climax high, but does so on visibly LOWER volume and a narrower spread.
What does Coulling's VPA conclude about this second, higher peak, and why is it more dangerous than the first?
- It is an up-thrust / false breakout above the climax high on declining volume, more dangerous because it traps breakout buyers above resistance while the smart money completes distribution into them
- It is a bullish breakout confirmed by the new high, and the lighter volume simply reflects a low-resistance path higher now that overhead supply has cleared
- It is a neutral retest that resets the trend, so the lower volume is irrelevant until price either holds the breakout or fails back below the climax high
- It is a second buying climax, and because each climax adds buying pressure, two in succession make a sustained continuation higher the most likely outcome
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