financial market intelligence zone

Dramatic market action that is common at tops and bottoms is known as blow offs and selling climaxes. Blow offs occur at tops, they usually occur after prices have moved higher over an extended period of time. At the end of the upward moves, prices rally sharply accompanied by a large increase in volume. Typically, all of those that were going to buy at this level have done so. Profit taking occurs and prices reverse, often suddenly, to the downside. Selling climaxes are simply the opposite of blow offs. They occur at the market bottom after prices have been declining for an extended period of time. Bargain hunters then jump in buying, reversing the trend, and sending prices higher. Through the years, investors have searched diligently for ways to identify important market bottoms. And the selling climax has been one of the major focuses of that search. A selling climax is generally defined as that capitulation of investors near major market bottoms, in which stocks are dump or abandon...