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Hi,
Al mentioned on this side something called a "Sell Vacuum test of Support", what is that please?
What are Bears and Bulls thinking and doing here, to cause a vacuum into Support?
Trying to understand this new concept to me.
Thanks
Noah
Hi Noah,
Imagine "Sell Vacuum" is like when the price drops really quickly to a certain level because no one's really interested in buying yet.
For the bears, they're thinking prices will keep going down, so they're not buying right now. They're actually adding to the selling pressure, making the price fall even faster. It's like they're pushing the price down and waiting for it to hit a level where they think it's worth buying again.
On the other side, the bulls are waiting for the price to hit that support level. They believe this level is strong and will hold up, making it a good time to buy. So, when the price finally reaches this support, they start placing their buy orders, which then creates some upward pressure.
So, this "sell vacuum" thing happens because the price falls sharply due to the lack of buying interest until it hits that support level. Once it gets there, the buying interest comes back, often leading to a bounce or a reversal. It's like the price gets sucked down quickly to that point and then gets a bit of a lift once it hits the support level where the bulls are ready to buy.
Hope this helps,
CH
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Just to add to what'd been said.
And does it need to be a single Climax bar? On a lower TF, wouldn't this look like a TBTL swing down?
Thanks!