medium · Volume Spread Analysis wyckoff-phases-schematics
You observe 'Supply Entering' the market (narrow-spread up-bar, fresh highs, ultra-high volume). The next bar is a wide-spread down-bar. However, the third and fourth bars are 'Tests' (down intraday, high close, very low volume).
What is the market telling you through this sequence?
- The initial supply is being tested and successfully absorbed by professionals, turning the potential weakness into a 're-accumulation' setup.
- The market is in a 'Buying Climax' and the low-volume bars are 'No Demand' bars disguised as 'Tests'.
- The wide-spread down-bar was 'Professional Support', which makes the initial high volume bullish.
- The 'Tests' are guaranteed to fail because 'Supply Entering' is a terminal signal for any uptrend.
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