medium · Volume Spread Analysis wyckoff-phases-schematics
A practitioner observes a bar with a narrow spread, an up-close, and volume that is lower than the previous two bars. This occurs after a significant rally.
What is the diagnosis?
- No Supply, suggesting that sellers have been exhausted and the rally will accelerate.
- No Demand, suggesting professionals are not participating in the move and a reversal is likely.
- Supply Entering, suggesting that the narrow spread is caused by professionals capping the price.
- A Test, suggesting that professionals are probing for sellers before the next leg up.
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