Change of Trend
1-2-3 reversal (Vic Sperandeo in "Trader Vic: Methods of a Wall Street Master")
1. Trend line broken
2. Lower high in an uptrend, or a higher low in a downtrend
3. Break below the previous low in an uptrend, or above the previous high in a downtrend
At point 3 the reversal is confirmed and everybody's brother is getting short. A stop run often follows to re-test the penetration at point 3. Quicker traders may get short at the X, or even closer to the 2 based on other indicators (divergence, fibonacci retracement, bollinger band touch, etc.)
http://stockwink.com/articles/trend-change.php