medium · Volume Spread Analysis wyckoff-phases-schematics
A stock breaks above a 12-week distribution range on ultra-high volume and a wide spread, closing on its high. The next three bars are narrow-spread down-bars on very low volume that hold above the breakout level.
What is this 'Negative Response to Weakness' telling you?
- The ultra-high volume was 'Supply Swamping Demand', signaling that the market is resting on thin trading before a massive, inevitable collapse in price.
- The narrow-spread bars are 'No Demand', confirming that the professionals genuinely have no real interest in these newly reached higher prices.
- The breakout was genuine, and the 'Negative Response' (lack of falling back into the range) confirms that the old resistance has become support.
- This is a classic 'UTAD' (Upthrust After Distribution) setup, and you should short aggressively on the low-volume bars that follow it.
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