medium · Volume Spread Analysis effort-vs-result-spread
A stock produces a wide-spread down-bar on ultra-high volume closing mid-bar. The next bar is a narrow-spread down-bar on significantly lower volume.
What is the sequence telling you?
- Distribution followed by no demand, a classic bearish setup.
- The professionals are marking prices down on low volume to attract buyers.
- A selling climax followed by a failed test, indicating more downside.
- Stopping volume followed by no selling pressure, a classic bullish setup.
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