hard · Volume Spread Analysis
A bar shows ultra-high volume on a wide-spread up-bar closing on the high, but the very next bar is a wide-spread down-bar closing on its low.
What is this two-bar sequence called and what is its implication?
- A 'Top Reversal' indicating that the extreme effort to rise was completely overwhelmed by supply on the second bar.
- A 'Shake-out' of the longs before the professionals take the price to new highs.
- A 'Selling Climax' showing that the professionals have finished buying and the markup will now resume.
- An 'Absorption' pattern indicating that the market is ready to move significantly higher.
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