medium · Volume Spread Analysis climaxes-tests-springs-upthrusts
An index has been in a steady decline. A bar appears with a very wide spread down, but the volume is significantly below average (RV < 0.50). The price closes on its low.
How should a practitioner read this 'falling pressure'?
- The market is in a selling climax and should be bought immediately.
- Institutional sellers are aggressively driving the price lower.
- This is a stopping volume event that signals an immediate bottom.
- The decline is losing momentum because professional selling is absent.
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