hard · Volume Spread Analysis supply-demand-smart-money
A practitioner identifies a 'Successful Test' (down during the day, close on high, low volume) in a stock that has been declining. However, the next three bars are narrow-spread down-bars.
How should this 'Negative Response' be interpreted?
- The test was 'Hidden Demand' and the drift is just professional re-accumulation.
- The low volume on the following bars confirms 'No Selling Pressure'.
- A secondary accumulation phase is beginning, and one should wait for a spring.
- The professionals saw the test but did not buy, confirming that weakness still dominates.
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