hard · Volume Spread Analysis
A trader sees a high-volume down-bar that closes off its lows during a decline. The next bar closes higher.
What is the correct term for this signal, and what must the professional expect next?
- This is a selling climax; the professional expects a V-shaped recovery to the prior highs within 5 bars.
- This is confirmed stopping volume; the professional expects a period of sideways trading to absorb the remaining supply.
- This is a shake-out; the professional expects an immediate vertical mark-up without further testing.
- This is no selling pressure; the professional expects the decline to accelerate as volume is too low to support a turn.
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