In this situation, you will have already seen a substantial rise in the market. The likely end of a rising
market is hallmarked by a narrow spread, on an up-day (or bar), accompanied by very high volume.
Ideally, the market should close on the high – this ‘capping’ action adds extra significance to the weakness
and the price should fall immediately in this situation.
If the prices are into new high ground, this will usually mark a top. The professional money has taken the
opportunity to transfer stock bought at lower levels to potential weak holders. How do we know this?
Well, if the professional money had been bullish (there is no way they are going to give you a good deal),
the spread of the day would have been wide and up. The spread is narrow because they are selling into a
surge of buy orders, which prevents the price from rising too much. The market-makers are giving the
buying public a good price because they have detected overall weakness and are taking profits.