Hi,
it goes like this: if an active market has 7-10 days in a row with either higher highs and higher lows, or, conversely, lower highs and lower lows...
then after this the market either trades lower than the previous day (for an uptrend) or higher than the previous day (for a downtrend) this signals a possible reversal and you preferably get into the position as close as possible to the extreme high (or low) with your stop at or just barely beyond this extreme high/low.

This pattern reversal did work perfectly twice with the big silver run to $50 and if I had been more patient and waited just a couple more days I could have just about retired from the profits. Not kidding. With way out of the money puts. If you remember I had posted when this happened and in just 4 days an Oct. 2011 34 put went from trading for $150- to over $40,000. Because it happened right before expiration. silver plunged from $40 to just above $25. It is interesting btw that most charts show a low around $29.50, but it did trade close to $25 early that Monday.
I had paid $900 for 3 of these positions much earlier and then sold them for around $8,000 apiece when the big drop just started. But I also held several other puts in Si. and in gold as well (5 total si. puts and 3 gold puts) and if I had just waited another 2 days it would have been over a quarter million instead of about 30,000 in profits.
But I had just broken up with my first fiancee in Russia and was traveling alone back out of the country when it happened and had limited contact with my broker so I took profits when I could.
Man, I've got some crazy stories let me tell ya...it was a very interesting time for me...lol!

:-)#