medium · Volume Spread Analysis wyckoff-phases-schematics
A bar shows ultra-high volume on a wide-spread up-bar closing on the high, but the very next bar is a wide-spread down-bar closing on its low.
What is this two-bar sequence called and what is its implication?
- A 'Top Reversal' indicating that the extreme effort to rise was completely overwhelmed by supply on the second bar.
- A 'Shake-out' of the weak longs, engineered by professionals before they push price on to new highs.
- A 'Selling Climax' showing that professionals have already finished buying, so the markup phase will now resume in earnest.
- An 'Absorption' pattern, indicating supply has been soaked up and the market looks ready to move significantly higher.
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