Outside Day! Bears take over?

Outside Day:
"Outside days can occur frequently on daily charts. The secret of the outside day is the bigger the better and it has more meaning if found at the end of a trend.

The outside day (OD) should completely encompass the previous day. It must have a higher high than the previous day and a lower low than the previous day.

One of the most important things about this pattern is that the bar closes in the opposite direction of the trend. If the trend is down the close on the OD must be near the high or in the upper part of the bar. The opposite is true of the up trend. The OD may still work if this is not the case but my research show that it is more effective if it does close in the opposite direction."

Stole this from definition from:surefire-trading.com

We even went slightly above all the levels everyone was calling for as the top to hit their stops. Classic market action.

Today's outside day has a range from 1101 to 1080, which is a MASSIVE range. Not to mention we were at key resistance in October (traditionally weak time for stocks) and over 20% above the 200 day moving average AND to top it all off we closed near the lows.. I have not even gotten into the fundamentals but from a purely technical standpoint today was the “waterloo” day for the bears.

The only thing that could have made this better is if we closed below support at 1080… (near where all the bears were calling the top. That old resistance is now support.)

We held this support level into the close. Also volume was not as high as it should have been given the way the market traded.

Still, this massive an outside day, taking into account all of the other factors already stated make today’s reversal look VERY SIGNIFCANT INDEED.