Thanks Jako- yes that's how I understand it- I think I read your...

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Rooster100

257 Posts.

491

21/08/19

10:57

Post #: 40072340
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Originally posted by Jako8557: ↑

It is not the narrowing spreads that confirm the buying, the narrowing spreads are an indication that price will (most likely) come back and retest the shakeout for supply (it doesn't have to come back like that, its just that price often does under these circumstances).
The fact that price initially goes up in response to the potential shakeout is probably enough to confirm the support (buying).

Remember this is the 'text book' response, usually for a highly liquid market.
In smaller and less liquid markets price can be pushed around a bit (or a lot) more causing uncertainty in the analysis.
When this happens all you can do is watch and consider the price action as it unfolds.

Sometimes the trading in smaller markets is a bit confusing, especially on smaller timeframes (daily and lower), in these cases I generally only change my original opinion if something completely obvious happens to prove it otherwise, otherwise I maintain the first thought.
This is why I use a weekly chart so often, as it takes a lot of the uncertainty of smaller timeframes away (or at least reduces it a fair bit).

cheers.

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Thanks Jako- yes that's how I understand it- I think I read your comment the wrong way and didn't separate the up bar and narrow spread as two different indications...

And talk about price being pushed around a lot- just looked at MND and already it's been gapped down on open again and smacked down to $16.40 and currently sorting itself out at around the $17 level @Beany72 mentioned. Phew....

XTL Value at posting: 3,590.8
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