USD: Not a Climax top

10 มี.ค.

USD just experienced an extremely high volume reversal with many calling this a "climax top". This is in no way a climax top. A climax top is a major topping formation after a parabolic advance. At the final stages of this parabolic advance, euphoric action to the upside is your signal of the final stages of this advance. Yes we had a high volume reversal on this candle, but was their any euphoric buying action before this bar? No. This is an extension shakeout, which essentially is a short term capitulation bar. Two things usually happen after this kind of candle, volume dry up into the 10 or 20 day avg, and then upside continuation, or general consolidating action without too much of a direction. A climax top will occur eventually, just not yet. Take SMCI for example. Many were quick to call it a climax top, but it quickly rebounded at the 10 day line as volume dried up and price set up for new highs. Parabolic, euphoric action on high volume to the upside will be your signs of a climax top.