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202 PART 7 - Indicators: The Trader’s Compass
resistance to continued highs, creating the climactic volume. Large supply
invites short sellers, and price correction begins to appear. The last group
of sellers, the public, is the biggest loser. They feel pressured, sell, the stock
drops to near support level where it is again accumulated cheaply by the
institutional traders, and begins to reach highs again with large volumes.
SMART The public does not buy a stock as it starts to rise. The public
MONEY always buys with a delay, after the stock has “proved itself”
as strong.
How to Interpret Climactic Volume at the Intraday High
Climactic volume at the high is usually a warning signal for an anticipated
correction.
Intraday Climactic Volume Correction, BBT
On this sample day above, BBT is hitting highs at the trading session’s
opening, approaches the high and adjacent to the high, volume grows
noticeably [1]. As we learned, volume that grows during the uptrend is a
positive sign. This is usually true, but not for a sharp jump in volume, as in
the example above. This is an irregular volume. Veteran buyers are taking
