hard · Volume Spread Analysis
During a Mark-Down phase, an index produces a low-volume up-bar with a narrow spread. This is followed by a wide-spread down-bar on increased volume.
What does this sequence confirm to the practitioner?
- The market is forming a Selling Climax and a reversal is imminent.
- The low-volume up-bar was a Successful Test, but it failed to produce a result.
- The professionals are accumulating stock on the down-bar through Absorption Volume.
- The rally attempt had No Demand, and the subsequent bar confirms Selling Pressure and the path of least resistance is down.
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