medium · Volume Spread Analysis climaxes-tests-springs-upthrusts
An index has been in a downtrend for two weeks and produces a wide-spread down bar on ultra-high volume that closes on the high. Over the next three bars, the price drifts sideways and eventually closes below the signal bar's low.
What is the most accurate assessment of this situation?
- The initial signal was a false positive, and supply continues to swamp demand.
- The ultra-high volume confirms the bottom is in, regardless of the following bars.
- The sideways drift indicates professional accumulation is occurring at a steady pace.
- This confirms a successful shake-out of weak holders before a major rally.
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