medium · Volume Spread Analysis climaxes-tests-springs-upthrusts
After identifying stopping volume, the market produces a low-volume test. However, over the next three bars, the price drifts sideways to slightly lower instead of moving up.
How should this 'Negative Response' be interpreted?
- Supply is quietly absorbed via a mushroom bottom pattern.
- The market is coiling for an ultra-wide upside breakout soon.
- The strength indicated by the stopping volume has been discounted.
- A successful shake-out of remaining weak holders is now in progress.
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