hard · Volume Spread Analysis
A 'Selling Climax' is traditionally followed by a period of sideways trading.
Why is an immediate V-shaped recovery considered 'unlikely' in standard VSA methodology?
- The 'herd instinct' requires at least 21 days to shift from a state of fear to a state of greed.
- Market-makers are prohibited by exchange rules from marking prices up more than 5% per day after a crash.
- Retail traders are too 'locked-in' and their constant selling pressure prevents any upward movement.
- The professionals who absorbed the panic need time to 'test' the market and verify that supply is truly exhausted.
Sign up free to see the explanation and track your rank →
More Volume Spread Analysis practice
- An equity averages a daily volume of 1,000,000 shares. Today… — How should this volume lev
- While observing a downtrend, you see a bar that dips into fr… — What does this indicate to
- A stock gaps up $3.00 on a positive earnings report after a… — How should this scenario be
- The S&P $500 index drops 5% over a week. During this same pe… — What is this 'relative str
- During a distribution phase, how do professionals use 'Good News' to facilitate their stra
- A 'Failed Test' is identified when a price probe into a prio… — What does this signal to t
- A 'No Demand' bar is identified by a narrow spread up-bar wi… — Why does this signal often
- In the Accumulation phase, why does volume typically remain low on rallies within the trad