[TinGull]

Nick...good start there. What I would say is that the spread was teeny showing no professional interest to continue the up move. If no one wants to continue the upmove, then the path of least resistance is DOWN. The next candle is DOWN on higher volume and then your last chance to get in is that low volume UP candle closing at the highs (4 candles after this doji) showing that there's no demand in this market. Then it heads down. Your analysis was great, tho.

As for where I found that resistance, you can see the previous high to the left on that chart.

And James, had that volume been very strong and it was still a small spread....my stance would be the same. If you have ULTRA high volume and a narrow spread, what's happening there? There is a lot of volume being traded in a small range. Theory is...if a lot of buying volume is happening, it's being done by the smaller players while the pros are selling into resistance, which is what you normally do see. The amount of selling indicated by the high volume is very telling for the strength of the eminent down move, IMO.