Major reversals Long
Parabolic wedge bottom
Accelerating selloff into a climax. Momentum is extreme; exhaustion still needs confirmation.
Read the sequence.
01 / OBSERVE → DECIDE
- ContextAccelerating selloff into a climax
- PressureMomentum is extreme; exhaustion still needs confirmation
- SetupAccelerating selloff into a climax. Require rejection or acceptance at the marked structure.
- DecisionBull reversal, failed bear resumption, and follow-through
The decision map
02 / QUICK REFERENCE- Location
- Accelerating selloff into a climax.
- Evidence
- Momentum is extreme; exhaustion still needs confirmation.
- Trigger
- Bull reversal, failed bear resumption, and follow-through.
- Invalidation
- Break below the climax low.
- First objective
- First resistance in a potential two-legged correction.
- Pass when
- Buying an accelerating decline before sellers fail.
03 / THE FULL ARGUMENT
Thesis & participant logic
Supplied study draft · adapted Brooks-style prose, not a quotation from Al Brooks
The bear trend is accelerating through multiple increasingly steep pushes. The move is climactic, but strong momentum means buying early is dangerous. I will wait for a strong bull reversal, failed attempt to resume down and follow-through before buying. My thesis is wrong below the climax low. I will target at least a two-legged correction toward the EMA.
A climax increases reversal probability but does not tell you precisely when the reversal begins.
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
First resistance in a potential two-legged correction. 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.