hard · Volume Spread Analysis supply-demand-smart-money
On a daily chart an Up-thrust appears: price spikes above resistance on a wide spread and very high volume, then closes near the low (down on the day). The next session is a narrow-range down-bar on volume that is LOW relative to the up-thrust but still ABOVE the 20-day average.
Which interpretation best reconciles BOTH volume facts with smart-money behavior?
- The up-thrust shows distribution; the follow-up bar's below-climax volume confirms supply is now exhausted, so the decline will likely stall and the range will hold.
- The up-thrust was a failed breakout by retail; the follow-up's above-average volume on a narrow down-spread shows demand re-entering to defend price, neutralizing the up-thrust.
- The up-thrust marks professional selling into the breakout; the follow-up's lower-but-still-elevated volume shows supply persisting without panic — distribution continuing in an orderly way, not yet absorbed.
- Both bars are bullish because the up-thrust pierced resistance and the follow-up's narrow spread signals seller exhaustion, setting up a renewed advance.
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