medium · Volume Price Analysis wyckoff-laws
A 'Failed Test of Supply' occurs when the price is pushed back into the accumulation zone but results in high volume.
What does this indicate to the insiders?
- Buyers are too eager here, so insiders must mark price lower to find better value.
- Selling pressure (supply) is still present in the market, so the accumulation phase must continue.
- The market has entered a full Price Waterfall, meaning every long position should be closed immediately.
- The breakout has already begun, and the high volume simply confirms the birth of the new uptrend.
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