medium · Volume Spread Analysis effort-vs-result-spread
In the context of market-maker behavior, why is a narrow spread on an up-day with high volume considered bearish?
- It indicates market-makers are selling to buyers, capping the upside potential.
- It represents a successful test of remaining supply in a rising market.
- It shows that market-makers are marking prices up far too aggressively and rapidly.
- It signals that there are effectively no willing sellers left anywhere in this market.
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