medium · Volume Price Analysis wyckoff-laws
A markdown starts with a gap down on the daily chart. During the first hour of trading, the gap is tested and held, but the volume on the test is ultra-low.
How should this be interpreted?
- The markdown is genuinely failing because volume stayed low on the test.
- The gap is a classic bull trap down move and should be bought immediately here.
- The gap down is a genuine shift in sentiment and the markdown is validated
- A Buying Climax is forming on ultra-high volume in order to fill the open gap higher.
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