Capitulation

The point at which investors abandon their positions en masse, surrendering to fear and selling at any price to stop the pain. Capitulation typically marks the climax of a sell-off, characterized by extreme volume, extreme pessimism, and waterfall-style price declines. Contrarian investors view capitulation as the ultimate buy signal -- Warren Buffett's famous advice to "be greedy when others are fearful" is essentially a capitulation playbook.