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 or a 'doji' state where the market is waiting for news before deciding on the next directional move.
- The narrow spread shows that the bears are attempting to push lower but are being met with equal buying power, creating a standoff.
- Low volume on a down-bar is a sign of weakness because it shows that buyers are unwilling to support the price even on small 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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