medium · 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, with no professional involvement at all.
- The down-bar was a genuine sign of weakness, and the up-bar is just 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 essentially random here, so these two consecutive bars are unrelated, coincidental events.
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