hard · Volume Spread Analysis background-trend-context
An up-thrust appears on a daily chart with ultra-high volume and a close on the low. However, the next three bars drift sideways with narrow spreads and very low volume.
How does the 'Negative Response' principle apply here?
- A selling climax is imminent because of this sudden price stall near the recent highs
- The market is entering a slow, grinding mark-down phase, drifting steadily lower on thin air
- The lack of downward follow-through suggests background strength is absorbing the weakness
- The no-demand bars that follow simply confirm the underlying bearishness of the original up-thrust
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