easy · Volume Spread Analysis effort-vs-result-spread
A stock is rising on wide spreads and high volume. Suddenly, you see an up-bar with a very narrow spread on even higher (ultra-high) volume.
What principle describes the likely outcome of this scenario?
- Perceived Value; the price has reached a level where every trader now views the stock as a fair-priced bargain.
- The 90-Minute Delay; the late-reported prior-session volume is simply being misread as today's genuine buying pressure.
- Trend Scaling; the stock is simply migrating from a short-term swing trend into a much longer-term secular bull market phase.
- Effort versus Result; the massive volume (effort) produced a poor price increase (result), suggesting supply is entering.
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