medium · Volume Spread Analysis climaxes-tests-springs-upthrusts
After a period of distribution, a market attempts to rally on narrow spreads and volume that is significantly lower than the prior two bars.
How should a professional practitioner interpret this bar?
- No demand, showing that professionals are not interested in higher prices and have withdrawn their support from the rally.
- A successful test, confirming that the path of least resistance is now to the upside.
- No supply, indicating that there are no sellers left in the market and the price is set to surge.
- A temporary consolidation phase where both buyers and sellers are waiting for a news catalyst to determine the next move.
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