Failed Rejections: When the Sentiment Trigger Reverses

The last chapter ended on a loose thread. A sentiment trigger holds until price crosses back through the threshold that fired it — and when that happens, the crossing is a signal of its own.

This chapter is that signal. It is short, because the rule is short, but it is one of the most useful things in the book, and it is the piece that most traders get exactly backwards.

What a Rejection Promises

Go back to the bearish sentiment trigger. Price tested R1. The sellers who were waiting there acted, and they pushed price ten percent of the range back into the box. The 90% level was crossed from above. The sentiment trigger fired: bearish sentiment on the inner boxes.