easy · Volume Spread Analysis climaxes-tests-springs-upthrusts
While observing a downtrend, you see a bar that dips into fresh low ground but recovers to close near its high. The volume for this bar is 0.45 times the 20-day average.
What does this indicate to a professional trader?
- The downtrend is accelerating because the buyers have completely withdrawn.
- A 'Buying Climax' is occurring as professionals absorb the panic.
- Supply is exhausted, as the probe to lower prices attracted very little selling.
- The market is falling under its own weight with high pressure.
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