S&P500 day trading course Daily chart with the “capitulatory sell off”?

S&P500 day trading course daily chart not capitulation

Capitulation normally occurs in a trend and would be in the over sold condition not in the over bought condition.

Capitulation means to surrender or give up normally after a loosing battle. In financial circles, this term is used to indicate the point in time when investors have decided to give up on trying to recapture lost gains as a result of falling market that has not retraced.

In other words, the investor has held as long as they can hold in a decreasing market.  They are at the point that if it goes any further they would “loose it all” so they throw in the towel.

This did have the high volume which is key to capitulation, but is not in the proper condition.

There are two conditions in the market, Over Bought and Over Sold.  In over bought the price is too high, when over sold the price is to low.

In order to capitulate, we must be in an oversold condition in a down trending market.  The market was clearly in an uptrend and therefore what we saw was not a capitulation but a correction.