medium · Volume Spread Analysis effort-vs-result-spread
An index has reached a multi-year high on news of strong economic growth. You see a wide-spread up-bar on the highest volume in six months, but the close is in the lower third of the bar.
What is the most likely professional maneuver occurring?
- The start of a markup, as the ultra-high volume proves that professional money is aggressively entering the market.
- Absorption volume, where professionals are buying the supply from 'locked-in' traders from a previous peak.
- A buying climax, where professionals are distributing their holdings to an euphoric public driven by the positive news.
- A hidden up-thrust, as the bar attempted to reach higher but fell back due to a lack of professional interest.
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