easy · Volume Spread Analysis climaxes-tests-springs-upthrusts
What is the professional purpose of an 'Upthrust' (SOW 2) - a wide-spread move up that collapses to close on the low?
- To absorb selling from traders who are 'locked-in' at higher levels.
- To test if there are enough buyers to sustain a move into new territory.
- To trigger buy-stops and trap traders into poor positions before a markdown.
- To mark prices up on low volume to see if anyone follows.
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