[isatrader]

Hi Isa, I have a question about a "key reversal day". Re-reading GTA 2012 Weinstein defines a key reversal day - when an index or stock makes a new high for the move, and then not only reverses and closes down on the day, but closes below the low of the prior day. He goes on to say a true key reversal should occur on significant volume.

Does April 4th qualify as a key reversal day. Open 1890, high 1897, close 1865 (which was below April 3rd's close of 1888)

I first noticed the term key reversal day in one of your interviews with Stan Weinstein. I believe it was in response to a question what changed his mind to be bullish at the end of 2012. Stan Weinstein's answer if I remember was a key reversal day in November. That brings me to my second question, what is a key reversal day for an upturn in a trend?

April 4th does qualify as a key reversal day in the S&P 500, and it had a reasonable volume pickup which can be seen better than the index chart in the SPY ETF.

I believe a key reversal day when the market is in a downtrend is just the opposite. So when it trades lower initially on the day to make a new low on strong volume, but then reverses and closes higher on the day and above the high of the previous day. Look up the term Bullish Engulfing Pattern on the web for some examples.

As always though, these are less significant on a daily chart than on a weekly chart.