There is only one strategy we teach that actually fights the trend. They are the climactic reversals that come in a bullish and a bearish version, the climactic decline buy (CDB) and the climactic advanced sell (CAS). These can occur on any time frame. The best of these plays come when all the time frames are working together, or at least not fighting the play. In other words, a fifteen minute CDB play is really outstanding when the daily chart is also a CDB. It is at least helped when the daily is several days down. Compare that to having a fifteen minute CDB happening on a stock that just had a serious breakdown on the daily or hourly chart just before you want to go long. You can see the conflict. The point of the CDB play is that we have ‘exhausted’ sellers at that moment on that time frame. It is difficult to say we have ‘exhausted sellers moments after we have a new break down.

However, these plays do work on any time frame, even if they occur only on one time frame, if they are quality plays. When a CDB or CAS occurs on a small time frame, but is not getting any help from other time frames, we sometimes use the nick name ‘mini climactic reversals’. There are a couple of things we want to see in these instances to help increase the odds of the play. Lets look at a play done in the VCM Proprietary Trading room. A ‘one minute’ climactic advanced sell. Below is the one minute chart.

If you are going to play the one minute CAS, it had better be set up right. Here, just on the one minute chart we can see it was an excellent play. We have eight consecutive green bars. The rally was ‘parabolic’ accelerating way away form the rising 20 period moving average. We formed a topping tail on the widest bar on the biggest volume of the run. Also, a very important criteria if playing a ‘mini’, is that it happened at a reversal time. The 9:35 reversal time is actually a very powerful one (we allow 5 minutes on either side of this reversal time, this happened at 9.38). Like all climactic set ups, we use a ‘retracement’ target, as shown on the chart above. While all this comes together nicely, there is something else we like to see on a ‘mini’ that is not needed on an all out CDB or CAS. Take a look at how this play looked on the 15 minute chart below.

Notice that the run ended into two forms of resistance. First it hit the gap fill from 6/20. Second it ran directly into a flat 200 period moving average on the fifteen minute chart. This moving average is the most powerful intraday moving average for stopping extended runs, and is even better when coupled with price resistance as well. All of these concepts apply equally as well for a CDB play also.