medium · Volume Spread Analysis effort-vs-result-spread
In a markdown phase, you see a wide-spread down-bar on low volume that closes on its low. This is often followed by a recovery attempt.
Why is this structurally different from a shakeout?
- Low volume on any down-bar always signals professional buying activity is about to begin.
- A genuine shakeout can never actually occur whenever the bar's price spread is unusually wide.
- The close on the low indicates that professionals are aggressively adding to their short positions here.
- This represents 'falling pressure' where the market drops due to a lack of professional support.
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