hard · Volume Price Analysis validation

During a downtrend, a bar prints a very narrow spread and closes mid-range on ultra-high volume — the heaviest in two months — yet the next bar fails to extend lower and instead closes higher. A second analyst argues the narrow-spread/high-volume bar is merely an anomaly to be ignored.

Applying Coulling's framework rigorously, why is that dismissal wrong?

  1. The bar is pure noise because a narrow spread always signals mere indecision by itself, so the accompanying ultra-high volume stays irrelevant until a later wide-spread bar finally confirms the true direction
  2. The narrow spread on extreme volume is the validating signature of absorption — heavy selling met by equal or greater buying that capped the move down, and the higher close that follows confirms demand overcame supply
  3. The bar should be discarded entirely because a narrow spread on extreme volume only ever carries meaning at market tops, where it classically signals a buying climax, and it never applies near a downtrend's actual bottom
  4. The extreme volume validates continued downtrend momentum going forward, since printing the single heaviest volume seen in a full two months of active trading clearly proves the sellers still firmly retain control of price

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