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Most recent major higher low - stops
Hey everyone , Dr. Brooks always says if the rally goes above the most recent major higher low then its not a bear trend anymore its probably either a TR or bull trend , and the opposite for a bull trend ( most recent lower high ) its probably not a bull trend anymore either a TR or a bear trend, well why ?
Like whats the reason that if in a bear trend for eg the rally come above the most recent lower high its likely not a bear trend anymore ?
is it just something his observed ?
or is it because its an indication that the bulls are strong enough to push up that much and the bears are less strong now to stop that ?
The premise for a bull trend is that prices goes up. If the price goes up, it will make higher highs and higher lows. If it doesn't make higher highs and higher lows, prices aren't really going up. So if a major higher low is broken, the market isn't trending as steeply as before. The bulls are less confident in their premise and they will probably want to sell high/new highs and buy low instead. It may still continue to go up as steeply, but most likely, it will continue in a broad bull channel, trading range, or even bear trend. And vice versa for bear trends.