Wyckoff trading method, page-985

  1. 16,642 Posts.
    lightbulb Created with Sketch. 1291

    No, that lower volume upbar is not much of a concern, and is potentially bullish for 2-3 more bars usually (and sometimes more depending on the overall influence on the chart).
    That lower volume upbar suggests price was trading in what I call a temporary supply vacuum (this is where almost all of the supply was bought on the previous bar or bars, which leaves a temporary lack of sellers in the market - which I call a supply vacuum. This supply vacuum allows price to move higher very easily on reduced volume, as there is much reduced selling pressure for a short while at that level).
    It is generally a fairly bullish indicator for a few bars (depending on the context of the overall chart), and also, keep an eye out for where price eventually does encounter supply again, as that will confirm where a supply line of resistance will be.

    Can you follow that OK ??

    cheers
 
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.