Major reversals Short
Major trend reversal from bull to bear
Failed high retest after a bull trend-line break. Bulls cannot resume the trend after a meaningful bear response.
Read the sequence.
01 / OBSERVE → DECIDE
- ContextFailed high retest after a bull trend-line break
- PressureBulls cannot resume the trend after a meaningful bear response
- SetupFailed high retest after a bull trend-line break. Require rejection or acceptance at the marked structure.
- DecisionBear trigger after the lower high or failed new high
The decision map
02 / QUICK REFERENCE- Location
- Failed high retest after a bull trend-line break.
- Evidence
- Bulls cannot resume the trend after a meaningful bear response.
- Trigger
- Bear trigger after the lower high or failed new high.
- Invalidation
- Break above the retest high.
- First objective
- Prior higher low or nearest support.
- Pass when
- Selling a trend-line break before testing bull strength.
03 / THE FULL ARGUMENT
Thesis & participant logic
Supplied study draft · adapted Brooks-style prose, not a quotation from Al Brooks
The market has been Always In Long, but the trend is mature and buying pressure is weakening. Bears broke the bull trend line with strength. Bulls then retested the high but failed to resume the trend, creating a lower high or failed breakout. I will sell below a bear signal bar after the failed test. My thesis is wrong above the retest high. I will target the prior higher low, EMA and possible measured move.
The trend-line break alone is insufficient. The failed test supplies stronger evidence that control may be changing.
04 / FROM IDEA TO A PLAN
Manage the thesis, not the need to be right.
Before entry
Write the structural invalidation and first realistic objective. Size to the loss you have already accepted, including costs and possible slippage. If the stop is unaffordable, reduce size or pass.
After entry
Reassess follow-through against the evidence above. Do not widen the stop or add because price “has gone too far.” A bounce to your average entry is not a market thesis.
At the objective
Prior higher low or nearest support. Decide ahead of time whether to exit or retain a defined remainder. Continue only while structure and follow-through support the trade.
During review
Record the entry-time chart, planned risk, maximum adverse excursion, actual exit, and whether the thesis was invalidated. Judge the decision separately from the outcome.