easy · Volume Price Analysis validation
During a sustained downtrend in a futures contract, a narrow-spread bearish candle forms on volume that is 2.5x the recent average.
How should a practitioner interpret this specific signature?
- This is a 'no demand' bar, meaning the market is likely to keep falling from here.
- The downtrend is being validated by a fresh surge in aggressive selling conviction.
- Institutional insiders are buying to absorb the remaining retail selling pressure.
- The market is caught in a short squeeze and should reverse sharply and immediately.
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