For those of you who don't know what an "outside reversal day" is, let me briefly explain.  It is the "outside" part which is important and without it, the "reversal" part is much less meaningful.  For this to occur, trading for the day must be both lower and higher than any trades performed the previous day.  In other words, the "bar" on the chart must totally engulf the action of the previous day and then close in the opposite direction of the previous momentum.  Outside reversal days are very rare in any market.  One of these may only occur once in a year's time or even longer.  The important thing to understand is when you do see a reversal day and accompanied by big volume, the "trend" is probably changing!

That said, "charts" in today's marketplace are not what they once were.  There was a time when charts were very reliable, this changed many years ago.  I say "changed" because if you go back to 1988, President Reagan by executive order created the "working group on financial markets" as a result of the '87 crash…otherwise known as the "plunge protection team" to prevent stock market crashes.  Initially, this may have been a good idea with "good intentions".  The problem is this, the "PPT" has morphed into something out of the old USSR which tries to "manage" everything, everywhere, ALWAYS!  This obviously changes the value of charts, if they can be "painted" (they are), then they don't show a true picture, rather, they show a picture those doing the painting want you to see.

Yes, I am sure some will call me a conspiratorial nut job for saying that all markets are manipulated all the time, they are!  I don't even have anything to prove, the banks and brokers have already done this for you by paying fines for "rigging" in nearly every market.  Why would they pay these fines if they were innocent?