How marvelous is a tool that lifts the skirt of the life blood of the markets, greed.
Greed propels the markets to extremes.
It is the idea that the folks that reaped the reward of driving the market in one direction, can't resist going to the well one more time. Ultimately, they realize that the game they have so cleverly played is about to end so they bail out and head in the other direction. The final act of pushing the market to extremes frequently provides telltale signs of weakness, sensed so easily by the floor traders. The final move is often a volatile event without the strength and conviction of previous surges. Tools can be written to evaluate the nature of these surges and objectively quantify the strength of the price moves.