Richard Wyckoff developed a psychological model for tracking the emotions that play out during the topping and bottoming processes. This chart shows the labels used by Wyckoff, placed where I believe they are appropriate. The same labels fit the Russell 1000 and S&P 500, but are less obvious.
As you can see, we should see another bounce higher. If it only partially retraces the "Upthrust" peak, this top will be very near the end. What will follow should be the mark-down phase, which will end with a panic capitulation event. We can then transition to Wyckoff's method for tracking the bottoming process.
As you can see, we should see another bounce higher. If it only partially retraces the "Upthrust" peak, this top will be very near the end. What will follow should be the mark-down phase, which will end with a panic capitulation event. We can then transition to Wyckoff's method for tracking the bottoming process.