medium · Volume Spread Analysis effort-vs-result-spread
An index has been rising for several weeks. Today, it produces an up-bar with a narrow spread on very high volume, closing on its high.
What is the most prudent interpretation for a professional practitioner?
- This is a 'no demand' signal, indicating the rally has exhausted its buyers.
- The high close confirms that the 'effort to rise' has been successful.
- The market is showing extreme bullish strength and is likely to accelerate upward.
- Professionals are capping the price by selling into the retail demand.
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