hard · Volume Spread Analysis effort-vs-result-spread
During a mark-up phase, you see a down-bar with a narrow spread and volume that is lower than the previous two bars. This bar closes in its upper third.
Why is this not a sign of the trend ending?
- It is a 'No Demand' bar on a down-close, mistakenly labeled bullish, but true No Demand only appears on an up-bar in mark-up.
- The narrow spread indicates the market is mathematically 'Overbought' on momentum indicators and needs a rest before the next leg down.
- It is 'No Selling Pressure,' confirming that professionals are not participating in the dip and the path of least resistance remains up.
- It shows classic 'Falling Pressure,' meaning that professionals are actively marking the price down on strong volume to accumulate more shares.
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