Highlights

• In this note, we discuss the three-step sequence that we track when monitoring a topping or bottoming process.
• In a topping process, these include 1) reach resistance or a target, 2) begin to reveal internal weakness via divergences of various sorts, and 3) begin to break supports.
• The objective is to slowly begin to implement any defensive changes intended as these steps unfold, such that a fully defensive position, however one might define that, is in place as step three is completed.

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