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34 What percentage of the time does a large magnitude day alert to congestion or reversal as opposed to a launch day for an established trend? The answer is that I must j look at what else is happening in conjunction with that large magnitude day, and its location relative to the other bars. If it is taking place in a trend, and the trend has not had a long life, with possibly one or two corrections, then the chances are 50-50 that following a correction, a new leg of the trend will follow. If the large magnitude day occurs at what appears to be a beginning of a new trend, for instance, following an exhaustion gap of a previous long term trend, then the chances are the large magnitude day will be followed by a gap day in the same direction as the large magnitude day. The most common occurrence that takes place is that large magnitude days are followed by a correcting day. If the large magnitude day occurs in congestion, it may portend a breakout from the congestion. More often, It wili be followed by some sort of correction. There is no way to know for sure. The best strategy is to consider these large days as alerts, and then view what has taken place before, and when possible after, to see them in context.
8963 8B13 8724  8413 8323 8212 long stop Figure 28 A few days later brings a 1-2-3 low. I ann long at the breakout of the #2 point. My stop is 1 tick below the #3 point.
8903 8813 8724 alert day- 8762  out at open 8212 Figure 23 Four days later there is an alert day and the caution light is on. The next day there is an inside day with a narrow trading range. I exit just after the open the following day. Im quite content with this kind of profit.
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