A trader explains how to spot market bubbles by comparing volume on the highest-price day versus the first down day after. When volume spikes massively on the top day then drops sharply on the red day, that's your signal a bubble is forming.
We're going to look at two intraday charts. So let's look at like this is like down the middle. This is like the top day and this is the first red day. You want to get confirmation that like we are in a bubble or the bubble is happening. The expansion is going to be huge. So in terms of volume, volume is going to be massive. Like you're going to see candles that are upwards of millions of chairs, candles a day. Maybe gets lower after the first opening session. Then it spurs, it has all these kind of versus the first red day. You're going to notice the volume is significantly lower. Like some of the biggest tells before I look at any price action is if the volume is much, much lower than the first top day because again we talked about on an ideal set that volume is kind of going up perfectly like an AT&T or a cellular service bar. Well, on a red day, not always, but a lot of the times the volume will be lower.
