medium · Volume Spread Analysis effort-vs-result-spread
When bad news hits the wires and a stock produces a high-volume down-bar closing on the high, what is the 'market-maker's' directional view?
- Bullish; they are happy to buy the stock from panicking sellers because they expect higher prices.
- Indecisive; the sheer high volume alone shows the market-maker is unsure of fair value.
- Neutral; the bad news is merely being processed and absorbed by the normal auction mechanism.
- Bearish; they are marking the price down deliberately to facilitate their own short-selling campaign.
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