What the lesson covers

1. 0:00A downtrend rallies. It always looks like the bottom. Usually it is the ceiling coming down to meet it.
2. 0:06The shape. Two lower highs and two lower lows already on the chart, then a fast rally into a falling reference that has capped price twice before, and a roll-over from it.
3. 0:17Why it forms. The rally is sellers stepping back and positions being closed, not demand arriving. Heavy volume into a rally that stalls anyway means the supply was there.
4. 0:27The levels that matter. The falling reference, the prior low, the prior lower high, and how far the last rally travelled. That comparison is the measurement that matters.
5. 0:37Where it completes. A close below the prior low completes it. Above the prior lower high the sequence of lower highs is finished and so is the reading.
6. 0:48How often it follows through. Sixty-two to sixty-eight per cent, a little under the bullish mirror, because markets drift upward over time and this one fights that.
7. 0:57The same shape failing. Here the rally does not stop. It goes through the average rather than turning at it, clears the last lower high, and the downtrend is simply over.
8. 1:08The tells. A rally holding above the reference on a pullback, one that has already outrun the last, or volume that keeps building all the way up.
9. 1:18In a downtrend the ceiling falls too. Read it fresh every bar.