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Al Brooks Price Action Fundamentals SmithJones > Climaxes > Flashcards

Climaxes Flashcards

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1
Q

What is a Climax?

A

a BO that Ends a Trend

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2
Q

BOs usually fail and is therefore at least a small climax, most are only a single bar. Most lead to minor reversals(either a PB in a trend or a leg in a TR)

A

BOs usually fail and is therefore at least a small climax, most are only a single bar. Most lead to minor reversals(either a PB in a trend or a leg in a TR)

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3
Q

Can a Climax be as brief as a single bar?

A

Yes it definitely can, it can also be a series of bars as well

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4
Q

Is every Trend Bar or Series of Trend Bars a Climax?

A

Yes every Trend Bar or Series of Trend Bars is a Climax, but depending on when the Climatic Bar occurs it is either a Measuring Gap Climatic Bar or an Exhaustive (Exhaustion) Gap Climatic Bar

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5
Q

When I have a Sell Climax and the market begins to Reverse where is the first target?

A

The Target is at the neckline or also know as the start of the climactic move

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6
Q

Whenever the market does something traders want to know if the new thing will continue or reverse

TRUE or FALSE?

A

TRUE, Traders always want a test for an event to gather more context

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7
Q

Is the top of the Sell Climax a Magnet?

A

Yes it is

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8
Q

Will the Bears sell again at the Top of a Bear Climax event?

A

Yes, they will but it is usually not a STRONG event. It could be a PB in a New BULL Trend

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9
Q

Is the bottom of the Buy Climax a Magnet?

A

Yes it is

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10
Q

Will the Bulls buy again at the Bottom of a Bull Climax event?

A

Yes but it is a low probability event, they will but it is usually not a STRONG event. It could be a PB in a New Bear Trend

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11
Q

Climax = Unusually strong surge late in a trend. Then abrupt, unexpected (low probability) big reversal. [Climax & Climatic Reversal are two terms with the same meaning]. It can be a single Trend Bar or a Series of Bars

A

Climax = Unusually strong surge late in a trend. Then abrupt, unexpected (low probability) big reversal. [Climax & Climatic Reversal are two terms with the same meaning]. It can be a single Trend Bar or a Series of Bars

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12
Q

Climax definition for Traders

A

Climax definition for Traders

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13
Q

What is a Climax BO late in a Trend?

A

an Exhaustion Climax

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14
Q

Climaxes, like all TRENDS; End at S/R.

The more reasons for a resistance zone on the chart(confluence), the more likely the Bear BO at the top of this trend will be an exhaustion gap

A

Climaxes, like all TRENDS; End at S/R.

The more reasons for a resistance zone on the chart(confluence), the more likely the Bear BO at the top of this trend will be an exhaustion gap

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15
Q

Buy Vacuum - Buy Climax that is Testing Resistance

A

Buy Vacuum - Buy Climax that is Testing Resistance

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16
Q

Sell Vacuum - Sell Climax that is Testing Support

A

Sell Vacuum - Sell Climax that is Testing Support

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17
Q

If there is a series of consecutive Sell Climaxes without much of a PB what does that mean for the Sellers?

A

This means there is no more Sellers and the Bulls will look to start Buying

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18
Q

If a single Sell Climax, it is mostly a Vacuum Test of Support

A

If a single Sell Climax, it is mostly a Vacuum Test of Support

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19
Q

Buy Climax Ends at Resistance (as Do all Bull Trends)

A

Buy Climax Ends at Resistance (as Do all Bull Trends)

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20
Q

Sell Climax Ends at Support (as Do all Bear Trends)

A

Sell Climax Ends at Support (as Do all Bear Trends)

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21
Q

Perfect V Top or Bottom is Extremely Rare

A

Perfect V Top or Bottom is Extremely Rare

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22
Q

What is the minimum goal after a Buy Climax?

A

a pause in the Trend; most Climatic Reversals are followed by TRs and not Reversals of Trend

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23
Q

Buy Climax Always has a Gap

A

Buy Climax Always has a Gap

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24
Q

After a big Surprise BO of this TR(low probability event), bulls take profits as they see this BIG BO Bull Trend Bar as a gift to take even more profits at a higher price. There is no one left to Buy making it a Buy Climax Exhaustive move

A

After a big Surprise BO of this TR(low probability event), bulls take profits as they see this BIG BO Bull Trend Bar as a gift to take even more profits at a higher price. There is no one left to Buy making it a Buy Climax Exhaustive move

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25
After a Buy Climax how long will the Bulls wait to Buy again?
The Bulls will wait TBTL(Ten Bars Two Legs) or more bars to Buy again
26
Sell Climax Always has a Gap
Sell Climax Always has a Gap
27
What do the Weak Bears see this as and what do the Strong Bears see this as?
Weak Bears see this as the start of a new big leg down and they're selling late & Strong Bears see this as a Surprise/Gift and use it to Buy back their shorts to take profit
28
V Bottom, Expect a MTR attempt
V Bottom, Expect a MTR attempt
29
Climatic Reversal, what follows?
Sometimes bull trend immediately reverses to bear(bull) trend. Most reversals transition into at least a small TR first. Most Reversals involve a TR. \*Here, there was a LH MTR after the Buy Climax Top
30
Confusion usually follows a Climax that is why a TR is likely after a Climax. BIG UP + BIG DOWN = Big Confusion a.k.a a TR
Confusion usually follows a Climax that is why a TR is likely after a Climax. BIG UP + BIG DOWN = Big Confusion a.k.a a TR
31
Do most Climaxes lead to Reversals?
No most Climatic moves do not lead to a Reversal. Instead, usually just end the current move. We never can confirm a climatic move until a reverse transpires to give the climatic move context
32
Climax can have 1 - 3 Big or Many Small Bars
Climax can have 1 - 3 Big or Many Small Bars
33
a single big brief bar is sometimes a result of what?
a single big brief bar is sometimes a result of what?
34
Can a Micro Channel be a Climax?
Yes it can or a Tight Channel made of ordinary bars. Due to the many bars being unsustainable
35
Can a Tight Channel be a Climax?
Yes it can (see chart below)
36
Failed Bull BO is a Climax; it is a surprise meaning it is a climax and since it is the start of a potential trend it is a BO, but this BO failed making it a Failed Bull BO
Failed Bull BO is a Climax; it is a surprise meaning it is a climax and since it is the start of a potential trend it is a BO, but this BO failed making it a Failed Bull BO
37
What do Trends usually begin with?
Trends usually begin with a BO Trend Bar or series of BO trend bars
38
What do Trends usually end with?
Trends usually end with a BO Trend Bar ( Climax )
39
What are the chances of this BO succeeding and why? A Measuring Gap or an Exhaustion Gap
This rally is very weak so I must be very aware of the follow-through after the big Bull Climatic Trend Bar. Does the gap(s) close? No as this chart below show a Bull Flag that came no where near to closing gaps. Higher prices are likely to follow for now maybe even the 1st leg in a TR or a MM up
40
Measuring Gap often has 2 Choices for Middle Line. Bulls look at MM targets to take Partial Profits.
Measuring Gap often has 2 Choices for Middle Line. Bulls look at MM targets to take Partial Profits.
41
Measuring Gap often has 2 Choices for Middle Line. Bulls look at MM targets to take Partial Profits.
Measuring Gap often has 2 Choices for Middle Line. Bulls look at MM targets to take Partial Profits.
42
Measuring Gap or Exhaustion Gap?
It appears as though it could be an Exhaustion Gap but after the climatic move the Bears had excellent follow-through which increases the odds of this being a Measuring Gap and the trader should be prepared for another leg down to the MM down target
43
After a Climatic move and a Gap closes what should the Trader expect?
If the Gap Closes, then usually a TR is soon to emerge in the markets
44
Bull Exhaustion Gap late in Bull Trend. Whenever I see this assume the odds are high this may be the end of the trend and reversal to bear trend or a TR.
Bull Exhaustion Gap late in Bull Trend. Whenever I see this assume the odds are high this may be the end of the trend and reversal to bear trend or a TR.
45
Possible Exhaustion Gap Move to end a Trend but the follow-through after the reversal bar is bad and also we have a negative gap of just overlapping bars we could see another leg down
Possible Exhaustion Gap Move to end a Trend but the follow-through after the reversal bar is bad and also we have a negative gap of just overlapping bars we could see another leg down
46
Sell Climax late in trend the first move is usually too just above the top of the final sell climax
Sell Climax late in trend the first move is usually too just above the top of the final sell climax
47
When the Bulls see a Big move like this late in a Trend they get EXCITED and they take profits. The Bulls are not going to take profits here if they think the market is just going to PB one bar because they will have to buy again and it may be hard to buy again. They are only taking profits because they think the market may correct for TBTL and possibly lead to a Reversal after a Big Bull Climatic move late in a Bull Trend. If the Bears do not look strong the Bulls will Buy and if they do look strong they will not Buy.
When the Bulls see a Big move like this late in a Trend they get EXCITED and they take profits. The Bulls are not going to take profits here if they think the market is just going to PB one bar because they will have to buy again and it may be hard to buy again. They are only taking profits because they think the market may correct for TBTL and possibly lead to a Reversal after a Big Bull Climatic move late in a Bull Trend. If the Bears do not look strong the Bulls will Buy and if they do look strong they will not Buy.
48
What is the safest way to to enter Short in this possible reversal even though it is early to enter? Entering this early does mean low risk which is a low probability trade
a Buy stop below a bar is the best course of entry to capitalize on the market continuing lower and after a strong bear BO if I want higher probability sell below big BO bars
49
Sell Exhaustion Gap Late, Strong Bear BO. A big Gift to Take Profits and observe the Bull Follow-Through to see if I want to sell again or observe to see if it is a reversal and to potentially go long as a gift to the Buyers
Sell Exhaustion Gap Late, Strong Bear BO. A big Gift to Take Profits and observe the Bull Follow-Through to see if I want to sell again or observe to see if it is a reversal and to potentially go long as a gift to the Buyers
50
Sell Exhaustion Gap a Gift to Smart Buyers. Brief opportunity for bulls to buy very low. Bulls (and bears) expect big correction up (at least TBTL\_ after Sell Climax
Sell Exhaustion Gap a Gift to Smart Buyers. Brief opportunity for bulls to buy very low. Bulls (and bears) expect big correction up (at least TBTL\_ after Sell Climax
51
Sell Exhaustion Gap a Gift to Smart Buyers. Brief opportunity for bulls to buy very low. Bulls (and bears) expect big correction up (at least TBTL\_ after Sell Climax
Sell Exhaustion Gap a Gift to Smart Buyers. Brief opportunity for bulls to buy very low. Bulls (and bears) expect big correction up (at least TBTL\_ after Sell Climax
52
Does Context affect probabilities?
Yes it does just look at the Bars to the left and connect it to what is presently occurring in the market ( use the context to identify the market cycle and then trade accordingly)
53
Note: Context Affects Probabilities; Look at Bars to the Left
Note: Context Affects Probabilities; Look at Bars to the Left
54
Once the market goes above this Bull follow-through bar after the sell climax what are the odds the market will at least go the to top of the sell climax?
Strong Buy signal bar has a 70% chance of a swing up
55
a Bull Channel is a Bear Flag, Bear Channel is a Bull Flag
a Bull Channel is a Bear Flag, Bear Channel is a Bull Flag
56
What does a consecutive Buy Climax lead to?
a Consecutive Buy Climax leads to no one left to Buy (Remember a Bull Channel has a 75% chance of a Bear BO; a break below the bottom of the channel leading into a TR or opposite trend)
57
Consecutive Buy Climax - Weak Bears Finally Give up and Strong Bears will never get squeezed out
Consecutive Buy Climax - Weak Bears Finally Give up and Strong Bears will never get squeezed out
58
Consecutive Buy Climax - No one Left to Buy
Consecutive Buy Climax - No one Left to Buy
59
Consecutive Buy Climaxes what is the odds of a Bull BO and what are the odds of a Bear BO?
25% chance of a Bull BO and 75% chance of a Bear BO
60
Every Trend Bar is a Climax
Every Trend Bar is a Climax
61
When there is a Bull BO above Bull Channel, does the market cycle start over?
Yes whenever there is a strong Bull BO of TR or Channel the market cycle starts over again. (In this 25% Bull BO above the Bull Channel which traders deemed a low probability event so trapped bulls and bears both will buy 1st PB so 2 legs up are likely)
62
After Consecutive Buy Climaxes expect a TR or Bear Trend - no one is left to buy and there is a 75% chance of a Bear BO, expect TBTL sideways to down
After Consecutive Buy Climaxes expect a TR or Bear Trend - no one is left to buy and there is a 75% chance of a Bear BO, expect TBTL sideways to down
63
With Consecutive Buy Climaxes sometimes there is a Bigger Climax that occurs in a Trend Resumption This bigger climax usually is the end of the Trend
With Consecutive Buy Climaxes sometimes there is a Bigger Climax that occurs in a Trend Resumption This bigger climax usually is the end of the Trend
64
This Rally is likely an Exhaustion Gap due to it being the Strongest Bull bar in over 50+ Bars into Trend. Consecutive climaxes and also a Wedge Top, MM target hit (meaning the resistance is a magnet and perfect for a reversal) & it is a Micro DT. This makes the Exhaustion Gap more likely.
This Rally is likely an Exhaustion Gap due to it being the Strongest Bull bar in over 50+ Bars into Trend. Consecutive climaxes and also a Wedge Top, MM target hit (meaning the resistance is a magnet and perfect for a reversal) & it is a Micro DT. This makes the Exhaustion Gap more likely.
65
Consecutive Sell Climax Bear Channel So Bull Flag. With Consecutive Sell Climaxes the odds are the market will soon go up for the Bulls; TBTL. (75% chance of a Bull BO in the Bear Channel)
Consecutive Sell Climax Bear Channel So Bull Flag. With Consecutive Sell Climaxes the odds are the market will soon go up for the Bulls; TBTL. (75% chance of a Bull BO in the Bear Channel)
66
If the Strong Bears believe that Bulls will only Buy lower what will the Bears do?
They will Bears will keep selling for another leg down
67
Consecutive Sell Climaxes = No one Left to Sell at this price The market must go higher to find sellers so Bulls scale into longs Weak Bulls give up and Strong Bulls will never get squeezed out (give up).
Consecutive Sell Climaxes = No one Left to Sell at this price The market must go higher to find sellers so Bulls scale into longs Weak Bulls give up and Strong Bulls will never get squeezed out (give up).
68
Sometimes the market needs an even bigger climax for the market to exhibit an exhaustion Therefore final climax is often very Big
Sometimes the market needs an even bigger climax for the market to exhibit an exhaustion Therefore final climax is often very Big
69
Sometimes Consecutive Sell Climaxes need one More Climax before a Reversal up, that reversal up will probably reach the top of the most recent sell climax before the market decides if it wants to resume or reverse.
Sometimes Consecutive Sell Climaxes need one More Climax before a Reversal up, that reversal up will probably reach the top of the most recent sell climax before the market decides if it wants to resume or reverse.
70
Consecutive Sell Climaxes - only 25% Chance of a Bear BO
Consecutive Sell Climaxes - only 25% Chance of a Bear BO
71
Consecutive Sell Climaxes sometimes gets a Bigger Sell Climax
Consecutive Sell Climaxes sometimes gets a Bigger Sell Climax
72
Consecutive Sell Climax Often Caused by Option Firms
Consecutive Sell Climax Often Caused by Option Firms
73
Consecutive Sell Climax Often Caused by Option Firms
Consecutive Sell Climax Often Caused by Option Firms

Al Brooks Price Action Fundamentals SmithJones (28 decks)

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