As the market or a stock leaves its area of distribution and moves down towards its objective, there may be a rush on the public's part to sell their stock. The fear of further price declines causes the public to panic. The public will then rush to the market and sell their shares all at about the same time. Downtrends don't always end with a Selling Climax, but when they do, it is a principle that we can identify and use to our advantage.

The Selling Climax comes after Preliminary Support and occurs within the objective range as indicated by the point and figure chart. The panicky selling creates an extreme expansion of price spread and volume that can last several days or as little as one day.

Remember that the Selling Climax is the action. It must be tested by a Secondary Test. If you have a positive Secondary Test, then you can say that the stopping action has been at least temporarily halted. What follows will be a new cause (build up on figure chart) that will need to be evaluated on its own merits, regardless as to what has proceeded it.