hard · Volume Spread Analysis wyckoff-phases-schematics
An index has been in a steady decline. It produces a wide-spread down-bar on ultra-high volume that closes on the highs. The following bar opens flat and remains in a tight range, closing lower on average volume. By the third bar, the index breaks below the first bar's low.
How should this 'Negative Response' be interpreted?
- The initial high-volume bar was genuine selling rather than professional absorption.
- A Shake-Out is now in progress, engineered to trap short sellers before reversing sharply higher.
- Professional Support is being established at a noticeably lower price level within the range.
- The market is entering a fresh Re-Accumulation phase before the advance.
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