Absorption Before Markup
Train bar-by-bar judgement for strength sequence by reading effort, result, close location and background before choosing an action.
Resistance is being approached repeatedly. The analyst must judge whether volume represents selling pressure or absorption of remaining supply.
Bar-by-bar tape
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1
Down · wide spread · very high volume
Close: off low. Climactic effort appears; do not assume reversal yet.
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2
Down · narrow spread · high volume
Close: middle. Downside progress contracts despite effort.
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3
Up · medium spread · above average volume
Close: near high. Demand responds, but confirmation is incomplete.
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4
Down · narrow spread · low volume
Close: high. Supply is reduced on the test.
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5
Up · wide spread · rising volume
Close: high. Sign of strength improves the bullish hypothesis.
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6
Down · narrow spread · low volume
Close: middle. Reaction is controlled; background remains constructive.
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7
Up · medium spread · average volume
Close: high. Follow-through confirms demand is still present.
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8
Down · narrow spread · very low volume
Close: high. Low supply reaction supports waiting for a quality entry.
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9
Up · wide spread · above average volume
Close: high. Markup attempt becomes more credible after tests.
Decision point
What is the best professional decision after reading the full sequence?
Expert decision
Wait for the low-supply test or confirmed follow-through before planning a risk-defined long idea.
Explanation
The best decision is not based on a label; it follows the whole sequence. In this lab, the category is strength sequence, so the stronger reading weighs background, effort versus result, close location, follow-through and risk location together. The correct response preserves uncertainty until confirmation improves and avoids turning a single bar into a prediction.
Why weaker answers are weaker
The weaker choices either isolate one candle, ignore background, treat volume mechanically, or accept risk before the idea has been confirmed.
Confirmation needed
- Low-volume reaction that refuses to break the prior test low.
- Follow-through above the minor supply line or resistance with acceptable risk location.
- No renewed wide-spread down bar on high volume after the test.
Invalidation signs
- A renewed high-volume breakdown through the test low.
- Failure to follow through after a sign of strength.
- A rally into resistance that becomes no-demand again.
Source frame
Built from Wyckoff/VSA principles of effort versus result, testing, absorption and confirmation. The bar sequence is synthetic and illustrative, not historical market data.