Chapter 6 · Intermediate
Volume Spread Analysis
Every event in Chapters 3–5 was defined partly in terms of volume and spread behavior. This
chapter makes that vocabulary explicit and portable — a small set of bar-reading rules you can
apply to any single bar, on any chart, independent of where it sits in a larger schematic.
Volume Spread Analysis (VSA) is Law 3 — Effort vs. Result — applied at maximum resolution:
one bar at a time. Every bar gives you three pieces of information to compare against each
other and against recent history:
Spread
High minus low — the "result." Wide spread means the bar traveled a lot; narrow spread means it barely moved.
Volume
The "effort" behind that travel. Compare against a rolling average, not an absolute number — what's heavy for a quiet stock is light for a busy one.
Close position
Where the close sits within the bar's own range. Near the high, near the low, or in the middle — this is what tells you who won the bar.
A bar only becomes meaningful once you compare these three against each other. A wide-spread,
high-volume up bar that closes near its high is unremarkable — effort and result agree, demand
won cleanly. The interesting bars are the ones where they disagree.
No Demand
An up bar with narrow spread on volume
lower than the prior two bars. In an uptrend, this says buyers aren't showing up to push price
further even though nothing is stopping them — a quiet warning that the move is running out of
willing participants. One No Demand bar is a yellow flag; a cluster of them near a resistance
level is a much stronger one.
No Supply
The mirror: a down bar with narrow spread
on volume lower than the prior two bars. In a downtrend, this says sellers aren't showing up to
press price further — supply is drying up. A cluster of No Supply bars near a support level
often precedes a Spring or a genuine reversal.
Stopping Volume
A down bar with heavy volume and wide
spread that closes well off its low, occurring after an extended decline. This is the volume
signature behind the Selling Climax from Chapter 3 — large, motivated buying absorbing the
supply of a panic move in real time. The up-bar equivalent, occurring after an extended
advance, is the volume signature behind the Buying Climax from Chapter 4.
Effort-without-Result (bearish)
A wide-spread up bar on very heavy volume
that fails to close near its high. Huge buying effort produced a disappointing result — a large
opposing seller absorbed the demand. Frequently marks a local top or the BC itself.
Effort-without-Result (bullish)
A wide-spread down bar on very heavy volume
that fails to close near its low. Huge selling effort produced a disappointing result — a large
buyer absorbed the supply. Frequently marks a local bottom or the SC itself.
VSA signals are not standalone buy/sell triggers — they only mean something in context, which
is why this chapter comes after Chapters 3–5, not before. A No Demand bar has a completely
different implication depending on where it occurs:
| Location |
What a No Demand bar implies there |
| Deep into an established markup (Phase E) |
Early warning the trend is tiring — worth tightening risk, not yet a reversal signal |
| On a rally testing resistance in Phase C |
Supports the case that the rally is a failed test / genuine Upthrust rather than a real breakout |
| On the pullback after a fresh SOS (Phase D) |
Actually bullish here — shrinking volume on the pullback is exactly what a healthy LPS should look like |
Same bar shape, three different conclusions. This is the biggest practical trap in VSA for
beginners who learn the signal names before the schematic context: memorizing "No Demand =
bearish" produces wrong calls constantly, because roughly a third of the time it's actually
confirming bullish structure.
A practical routine
Don't scan a chart bar-by-bar looking for VSA signals in isolation. Instead: first locate the
phase (Chapters 2–4), then use VSA to confirm or reject the specific event you'd expect to see
there. Expecting a Spring in Phase C? Check the break bar's close position and the reclaim
bar's volume. Expecting an SOS in Phase D? Check that the breakout bar actually has the wide
spread and volume expansion an SOS requires, rather than assuming any new high qualifies.
