A steep, near-vertical final surge at the end of a long rally, on huge volume, followed by a sharp reversal.
A blow-off top is the buying equivalent of capitulation. The last holdouts and the fomo crowd pile in, volume explodes, and there is no one left to buy. The reversal is fast because the late buyers have no plan.
It is recognizable in hindsight and difficult in real time; parabolic moves can extend further than seems possible.
Example: an asset that took a year to rise 100% gains another 60% in two weeks on record volume, then loses that 60% in the following two weeks.
Original diagrams for the ideas on this page. Illustrative, not real market data.
The mood around a market cycle. The same price path labelled with the feelings that tend to travel with it, from optimism up to euphoria and down through panic to despondency. Confidence is highest where the most money is already committed and prices are highest.
Educational only, not advice. Spotted an error? Post in Site Feedback.