One of the biggest misconceptions in technical analysis:
A massive volume spike on a red day does NOT automatically mean massive selling pressure.
Look at Bloom Energy $BE:
June 26: 18% down on 4x volume
Sept 18: 5% down on 4.5x volume
More shares traded Friday, yet the price damage was significantly smaller.
Volume tells you HOW MUCH traded. It doesn't tell you WHY it traded.
Friday was triple witching + the final session before $BE S&P 500 inclusion became effective, triggering index rebalancing and enormous mechanical volume.
So next time you see a massive volume spike on a red day without equivalent downside in price, don't automatically assume heavy selling.
A volume bar alone never tells the full story.
Price + Volume + Context. Always.
A massive volume spike on a red day does NOT automatically mean massive selling pressure.
Look at Bloom Energy $BE:
June 26: 18% down on 4x volume
Sept 18: 5% down on 4.5x volume
More shares traded Friday, yet the price damage was significantly smaller.
Volume tells you HOW MUCH traded. It doesn't tell you WHY it traded.
Friday was triple witching + the final session before $BE S&P 500 inclusion became effective, triggering index rebalancing and enormous mechanical volume.
So next time you see a massive volume spike on a red day without equivalent downside in price, don't automatically assume heavy selling.
A volume bar alone never tells the full story.
Price + Volume + Context. Always.
