medium · Volume Spread Analysis climaxes-tests-springs-upthrusts
An index has been in a markdown phase for several weeks. Today, it produces a wide-spread down-bar on ultra-high volume, but the price closes in the upper third of the bar. The next bar closes higher.
What is the technical name for this event and its implication?
- Stopping volume, indicating that professional buying has entered to arrest the decline.
- A shakeout, signifying the final flush of weak holders within an existing uptrend.
- Selling pressure, suggesting that the markdown is accelerating as more professionals exit.
- A selling climax, marking the absolute bottom of the bear market and the start of a mark-up.
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