medium · Volume Spread Analysis effort-vs-result-spread
A stock has been rising steadily. It produces a wide-spread up-bar on ultra-high volume, but the next day's bar is a down-bar closing near its low.
What is the significance of this 'Effort to Rise Without Result'?
- It represents a temporary shake-out designed to clear out the remaining weak holders and clean up overhead supply before a vertical move higher.
- It indicates the 'Path of Least Resistance' is still upward, since the ultra-high volume confirms strong, genuine buyer commitment.
- The ultra-high volume on the up-bar contained more selling than buying, and the failure of the next bar confirms professional distribution.
- The market is testing the highs on comparatively low volume to ensure no sellers remain before a final buying climax begins.
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