medium · Volume Spread Analysis effort-vs-result-spread
An index has been rising steadily for three weeks. Today, the price moves into new high ground on a narrow spread, but the volume is nearly triple the average. The price closes in the middle of the bar's range.
How should this activity be interpreted?
- Professional money is capping the price by selling into the retail demand.
- This is a successful test showing that no sellers are left in the market.
- This is a sign of extreme strength, as high volume always supports a price rise.
- The market is experiencing a lack of interest from both buyers and sellers.
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