"Capitulation of Volume" - an opposing analysisWhen prices fall...

"Capitulation of Volume" - an opposing analysis

1. When prices fall on increasing volume, the trend is gathering strength to the downside.
2. A price drop on large volume is a stronger signal that something in the stock has fundamentally changed to the downside
3. Typically, at a market bottom, falling prices eventually force out large numbers of traders, resulting in volatility and increased volume. You may see a decrease in volume after the spike in these situations, but how volume continues to play out over the next days, weeks, and months should be assessed with other metrics., and not simply based on conjecture.

As an example, one could adopt the Chaikin Money Flow indicator to verify the trend direction.