Price momentum builds strongly in both directions but different crowd mechanics drive the underlying trends. Greed fuels market rallies while fear guides market selloffs. Each trend direction generates special chart characteristics that elicit different formation types. In other words, don't flip a chart upside down and try to predict price movement in a very active market. But smaller thrusts within range constriction show less variation from uptrend to downtrend. In this narrow environment, the crowd behaves in a more rational manner when it moves in and out of positions. These smaller doses of greed and fear look alike on the price chart.

Consider the differences between uptrends and downtrends in the development of trading tactics. Stocks tend to fall farther and faster than they rise. Volume builds rallies but markets will fall from their own weight. Greed burns out faster than fear, which must be healed over time. Fear induces panic selling more reliably than greed induces panic buying. Momentum traders duck for cover quickly at new highs but value investors routinely exercise great patience at new lows.

Long-term market success depends on the ability to adapt to diverse trading conditions. Many Pattern Cycle phases signal profitable short sales opportunities. As with long positions, these setups align according to the trend-range axis. Classic strategies sell pullbacks to old highs within ranges and use bear rallies to execute lower-risk entries in downside momentum markets. Focus the short sale entry through several time frames and start building profits.

Never underestimate the public buying power that drives modern markets. Always use 3-D charting to examine major indices in the view above the intended execution. Avoid selling short near major market support levels. Also remember that indices tend to shift direction frequently as corrections build. An expanding selloff on a 5-minute Nasdaq chart may not offer a safe environment for short sellers unless they operate within a small execution window.

Trends depend on their time frame. You can safely sell short into corrections that last only a few bars or days. But these brief entries require very careful planning. Review other time frames to avoid trend relativity errors, and examine the pattern closely to pick optimum entry points. Once a selloff is set into motion, buyers pull away and make execution more difficult. Wait for a pullback entry or seek more consistent results by taking a position in narrow range bars just prior to the break. Classic contraction against a S/R barrier offers a great tool to locate short sales as well as long positions.

Chasing downside momentum ends trading careers as efficiently as its long-side twin. But it's even more dangerous. As selling pressure eases, market makers and specialists ignite vertical rallies to shake out the short positions. These occur so quickly that there's often no time to escape without serious damage. Professionals know that retail shorts are inexperienced and probably motivated by fear. Underlying retail optimism forces stomachs to turn violently when short positions are squeezed. This triggers panic covering which feeds on itself until the price chart prints a sharp, upward spike. You should be capitalizing on this popular insider shakeout, not suffering from it.

Position the short sale ahead of, behind or against the crowd to avoid these painful bear rallies. Squeezes erupt after downward price expansion invites latecomers with very bad timing to sell short. These volatile events end as quickly as they begin. They can carry further than simple pullbacks after upside breakouts due to the market's long-side bias. Keep in mind that squeeze tops offer one of the best shorting levels on the price chart. Shorts fuel rallies up to a point in downtrends but further price gains require real demand.