BOB and BOT

I found a good example of a Blow-off Bottom followed weeks later by a Blow-off Top. I'm using a weekly chart to show how the BOB (and BOT) can be found from minutes to months. Once more the rules are simple -

Blow-off Bottom - two red candles where the low of the second candle is lower than the low of the first. The volume of the second candle is greater than the volume of the first. These are followed by a third candle (green/white) where the third candle's low is higher than that of the second. At least one candle of the first two should close below the EMA 8 as a minimum (less than EMA 4 is best). See the circle in the chart below. (For purposes of full disclosure - the third candle in this sequence is also a cross over).



Blow-off Top - two white/green candles where the high of the second candle is higher than the high of the first one. The volume of the second candle in the sequence is less than the volume of the first candle. The third candle is red and the high of that candle is lower than the high of the second candle. At least on candle of the first two should close above the EMA 8 as a minimum (greater than EMA 4 is best). See the rectangle in the chart above.

Now - when you see a blow-off top you should probably do one or both of two things - first - end any long trades you have in place, second - sell the stock short.

This is not an invitation to speculate - don't be fooled by randomness - we all know that there is no such thing as a pattern that repeats itself so consistently as to earn a silly name such as Blow-Off Bottom or BOB - don't we? And something even sillier like a "cross over pattern" couldn't possibly exist - could it?