Trader's Toolbox: Reversals

Rules to mark a reversal high:

1. The market must make a new high for the last six to eight weeks.
2. The market must close lower than the previous day’s (or week’s) close.
3. The market must reverse the previous day’s (or week’s) action.

-To clarify rule three, the day or week preceding the reversal must have posted a positive close.

4. The market must post follow through action the next day (or week).

-To clarify, the market must close lower on the day (or week) following the reversal.
5. Fifth, the reversal must be accompanied by moderate to high volume. And, finally, the reversal must occur in a terminal (critical) area.

From CLUB.INO.COM. Original post linked on the title.