hard · Volume Spread Analysis
After a buying climax, the market drifts sideways for 10 bars. Bar 11 is an up-bar with a narrow spread and volume lower than the prior two bars, closing in the lower third. This is followed immediately by a wide-spread down-bar.
How should a practitioner interpret Bar 11?
- A no-demand bar confirming that professional interest has withdrawn.
- A successful test of supply, indicating the mark-up will resume.
- Absorption volume indicating that supply is being consumed.
- A shake-out intended to flush out remaining weak holders.
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