medium · Volume Spread Analysis background-trend-context
Compare two scenarios in a rising market: Scenario A: Up-bar, narrow spread, high volume, close on high. Scenario B: Up-bar, wide spread, high volume, close on high.
Which statement accurately differentiates these based on market-maker behavior?
- Scenario A is a 'Test' of supply, while Scenario B is a 'Buying Climax'.
- Both are equally bullish because volume is high and the close is at the top of the range.
- Scenario B is bearish because the 'Excessive Volume' will likely contain hidden selling.
- Scenario A is bearish as market-makers are capping price by selling; Scenario B is bullish as they are marking up against demand.
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