medium · Volume Spread Analysis wyckoff-phases-schematics
Why is 'Professional Support' (a wide spread down-bar closing on the highs) often the event that ends the 'Automatic Reaction' phase?
- The market-maker is marking prices down so quickly that they run out of inventory and are forced to buy shares back right away.
- It signifies that the 'strong hands' are stepping in to absorb the first wave of retail panic to keep the distribution range stable.
- The professionals have decided to launch a brand-new markup phase and are buying back every share they previously sold short.
- It confirms that the underlying background is actually strong and healthy, meaning the earlier buying climax was simply a false signal.
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