medium · Volume Spread Analysis wyckoff-phases-schematics
In the context of a potential transition from accumulation to markup, what is the significance of a down-bar with a narrow spread and volume lower than the prior two bars, occurring after a period of strength has already appeared in the background?
- It indicates a period of indecision, a 'doji' state, where the market is simply waiting for fresh news before it chooses its next directional move.
- The narrow spread shows the bears attempting to push the price noticeably lower but being met with roughly equal buying power, creating a temporary standoff.
- Low volume on a down-bar here is a clear sign of underlying weakness, because it shows genuine buyers are unwilling to support price even on these small pullback dips.
- It represents 'No Supply,' confirming that the previous professional buying has effectively removed the floating supply and the path of least resistance is up.
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