A Spring is a principle that allows us to examine the supply levels that are below a trading range or under other support levels. Before you consider trading a spring, you should be able so see a Selling Climax somewhere on your chart. This gives you an added level of protection. If you don't see a Selling Climax, you are better off not trading that particular spring. It is not to say that it wont work out, but the balance of probabilities are greater if you combine principles.

There is no doubt when you have a #1 Spring as the price action and volume is substantial. A #3 spring is just the opposite. It is a subtle penetration of the support level where no supply is present. The obvious lack of supply on the penetration leaves for no doubt. But the # 2 Spring is somewhere in the middle and therefore needs to be tested. Not all #2 Springs have a test, but it is better to wait for one rather than taking a position on something that doesn't work out

The initial penetration of the support level can be sharp and you will see some evidence of increased price weakness indicated by a widening of spread and increased volume over the general level of the trading range. It is how well this supply is being absorbed that we are evaluating. You don't want the spring to stay down below the support level too long. You want it to bounce up into the trading range and then have a test. The test of the #2 spring should have significantly less volume, and may come right away or several days later. The test should meet support relatively quickly. If supply comes out on the test, the spring will need to be tested again. You can have several tests of the same spring.