medium · Volume Spread Analysis climaxes-tests-springs-upthrusts
During a Mark-Down phase, an index produces a low-volume up-bar with a narrow spread. This is followed by a wide-spread down-bar on increased volume.
What does this sequence confirm to the practitioner?
- The market is forming a genuine Selling Climax right here, and a sharp bullish reversal in price is now imminent.
- The low-volume up-bar was technically a Successful Test of supply, yet it ultimately failed to produce a meaningful result.
- The professionals are quietly accumulating stock on the down-bar itself, absorbing available supply through Absorption Volume.
- The rally attempt had No Demand, and the subsequent bar confirms Selling Pressure and the path of least resistance is down.
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