Major reversals Short
Buy climax followed by failed continuation
Late bull climax followed by a weak new high. Urgent buying is followed by failed continuation.
Read the sequence.
01 / OBSERVE → DECIDE
- ContextLate bull climax followed by a weak new high
- PressureUrgent buying is followed by failed continuation
- SetupLate bull climax followed by a weak new high. Require rejection or acceptance at the marked structure.
- DecisionBear control after a failed bull retest
The decision map
02 / QUICK REFERENCE- Location
- Late bull climax followed by a weak new high.
- Evidence
- Urgent buying is followed by failed continuation.
- Trigger
- Bear control after a failed bull retest.
- Invalidation
- Break above the climax extreme.
- First objective
- EMA area or base of the climax.
- Pass when
- Assuming every large bull bar ends the trend.
03 / THE FULL ARGUMENT
Thesis & participant logic
Supplied study draft · adapted Brooks-style prose, not a quotation from Al Brooks
Bulls created unusually large bars, expanded range and urgent buying late in an existing bull move. After the climax, bulls attempted another breakout but could not obtain follow-through. I will sell only after bears demonstrate control through a credible reversal and failed bull retest. My thesis is wrong above the climax high. I will target the EMA or base of the climax.
Do not automatically short a buy climax. Strong trends can produce repeated climaxes.
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
EMA area or base of the climax. 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.