medium · Volume Spread Analysis effort-vs-result-spread
An index shows an 'Upthrust' at a resistance level. The next bar is a down-bar, but it has extremely narrow spread and volume is the lowest in 30 days.
According to the 'Negative Response' principle, what does this 'No Selling Pressure' indicate in this context?
- The extremely low volume on this particular down-bar confirms that the 'Upthrust' was fully successful in scaring away every single remaining buyer.
- The 'Upthrust' did not trigger a wave of selling, suggesting that supply is not actually swamping the market and the 'Upthrust' may fail to reverse the trend.
- The 'Upthrust' was actually disguised 'Hidden Selling' in a false move, and this narrow-spread down-bar marks the start of a slow, gradual 'Mushroom Top' formation.
- This is simply textbook 'No Demand' following an 'Upthrust' reversal signal, which VSA practitioners would classify as a classic 'Strongest Short' setup right here today.
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