medium · Volume Price Analysis validation
You are monitoring a 5-minute ES E-mini chart. The market makes three successive higher-highs. The volumes for these pushes are 100K, 70K, and 45K contracts respectively. On the third push, the Delta volume is +500 compared to +8,000 on the first push.
What is the trade implication?
- The Delta divergence is irrelevant because the price is still making higher highs, which is the only leading indicator.
- The market is becoming more efficient, requiring less volume to move the price higher as sellers give up.
- The trend is reaching exhaustion and a reversal is imminent as institutional buying pressure has evaporated.
- This is a bullish signal indicating a lack of supply, often called a 'No Supply' sequence.
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