easy · Volume Spread Analysis wyckoff-phases-schematics
A stock has been in a steady decline. It suddenly produces a wide-spread down-bar on ultra-high volume, closing near its low. The very next day is an up-bar.
What does this sequence reveal about the 'effort' on the down-day?
- The high volume on the down-bar was purely retail selling and had no professional involvement.
- The down-bar was a genuine sign of weakness and the up-bar is a 'dead cat bounce'.
- The effort to fall failed to produce a lasting result, indicating buying was hidden in the down-bar.
- The market is random and the two bars are unrelated events.
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