medium · Volume Spread Analysis effort-vs-result-spread
A weekly chart for a commodity shows 'Supply Entering' (high volume, narrow-spread up-bar). The daily chart shows a successful 'Test' (low-volume down-bar closing high).
How should a practitioner reconcile these timeframes?
- The weekly weakness takes precedence; the daily test is likely to fail (Negative Response) because the background is weak.
- The daily 'Test' is the primary trigger and should be bought immediately regardless of the weekly chart.
- The successful test on the daily chart invalidates the 'Supply Entering' on the weekly chart.
- The practitioner should wait for a 'Shake-Out' on the monthly chart to confirm the entry.
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