After a Buying Climax, the price action will do one of two things. Either it will move sideways, or it will have a reaction. If it has a reaction, that reaction is caused by either more selling or simply a lack of demand from exhausted buyers that have been filled up with shares during the frenzy of the Buying Climax. Because this reaction is not based on anything substantial, it is called the Automatic Reaction and normally only last a few days.

Remember what we said about the Law of Cause and Effect. For there to be an effect, there must first be a cause, and that the effect can not be separated from that cause. At the point of the Buying Climax, we have used up our figure chart count (our cause). We now have nothing.so we really can't get a significant move in either direction. For a move, we must develop a cause.and it is going to take some time to develop that cause.

Automatic Reaction