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Northern Illinois | The old standard thinking or belief is that markets top in a way in which you are describing. They have that flush out so to speak where there is a spike high. The market tops in a short period of time and there is not a lot of time spent at the top or high.
Market bottoms are thought to form with more time spent in the lower price range. People refer to this as a demand building phase. So bottoms do not for the most part have sharp abrupt bottoms where there turn around quickly but rather they have what are referred to as saucer bottoms. You don't hear the phrase saucer tops.
But keep in mind all markets are different and if there was a dramatic event a spike low and abrupt turn around is certainly possible. | |
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Psychology of market bottoms
