medium · Volume Spread Analysis climaxes-tests-springs-upthrusts
A market is characterized by 'falling pressure' in the background (wide-spread down-bars on low volume). Price arrives at a major support level. Bar 1 dips below support and closes high on low volume. Bar 2 is a wide-spread up-bar that closes high on high volume.
What does the 'falling pressure' background do to the probability of this spring?
- It increases the probability because falling pressure indicates the bear move lacked professional conviction from the start.
- The background score remains neutral because falling pressure and springs are both low-volume events.
- It suggests the spring is a trap because the market has not yet seen a high-volume selling climax.
- It decreases the probability because falling pressure is a sign of a lack of professional interest in the asset.
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