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SPREAD AND VOLUME Analysis III

The document discusses how volume implications can provide insights into market trends based on whether the spread is increasing or decreasing in advancing or declining markets. Increasing spread and volume in an advancing market indicates normal aggressive uptrend action, while decreasing volume may signal a loss of demand and vulnerability. Decreasing spread in an advancing market could mean supply is attempting to reverse the trend.

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Pan Peter
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367 views

SPREAD AND VOLUME Analysis III

The document discusses how volume implications can provide insights into market trends based on whether the spread is increasing or decreasing in advancing or declining markets. Increasing spread and volume in an advancing market indicates normal aggressive uptrend action, while decreasing volume may signal a loss of demand and vulnerability. Decreasing spread in an advancing market could mean supply is attempting to reverse the trend.

Uploaded by

Pan Peter
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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SPREAD AND VOLUME analysis – III

ADVANCING MARKET
INCREASING SPREAD IN AN ADVANCING MARKET – VOLUME IMPLAICATIONS
INCREASING VOLUME:
Increase demand within an uptrend
Normal aggressive uptrend action
If Spread begins to narrow at all, this is evidence of Supply coming in to attempt stop the uptrend
If massive, have climactic action
DECREASING VOLUME:
Rallying easily but having evidence of decreasing Demand
May soon become vulnerable to a decline
AVERAGE VOLUME:
Normal uptrend action
However, if volume does not deep pace with spread, then there is evidence of decreasing demand,
despite the price progress
DECREASING SPREAD IN AN ADVANCING MARKET – VOLUME IMPLAICATIONS
INCREASING VOLUME:
Good supply coming into attempt to reverse the trend
DECREASING VOLUME: Soure: Jerry Blythe, M.D., July 2,1997

Running out of Demand; volnerable to reaction Prepared by Roman Bogomazov


AVERAGE VOLUME:
Meeting some Supply as price progress slows @tritapu
DECLINE MARKET
INCREASING SPREAD IN AN DECLINE MARKET – VOLUME IMPLAICATIONS
INCREASING VOLUME:
Increasing Supply within a downtrend
Normal aggressive downtrend action
If Spread begins to narrow at all, this is evidence of Demand coming in to attempt stop the uptrend
If massive, have climactic action
DECREASING VOLUME:
Declining easily but having evidence of decreasing Supply
May soon become vulnerable to a Rally
Evidence of less pressure on downside. Prices are declining not because of increasing supply so much as the
declining because of lack of price support or Demand. However, Supply is still dominant over Demand, and
prices can continue declining a long ways until Supply either exhausts ifself on the downside or demand
comes in to attemp to reverse the trend. As of now, there is now evidence of either, only that Supply may be
lessening
AVERAGE VOLUME:
Normal uptrend action
However, if volume does not deep pace with spread, then there is evidence of decreasing demand, despite the price progress.
DECREASING SPREAD IN AN DECLINING MARKET – VOLUME IMPLAICATIONS
INCREASING VOLUME:
Good demand coming into attempt to reverse the trend
DECREASING VOLUME:
Running out of supply; vulnerable to a rally
AVERAGE VOLUME:
Evidence of some demand present as liitle progress being made on downside

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