FYI:
Conditions Preceding a Trend Day
Several key price patterns can serve as alerts to the potential for significant range expansion:
-NR7 -- the narrowest range of the last 7 days (Toby Crabel introduced this term in his classic book, Day Trading With Short-term Price Patterns and Opening-range Breakout);
-a cluster of 2 or 3 small daily ranges;
-the point of a wedge-type pattern (which usually exhibits contracting daily ranges);
-a Hook Day (wherein the open is above/below the previous day's high/low -- and then the price reverses direction; the range must also be narrower than the previous day's range; leads traders to believe that a trend reversal has occurred, whereas the market has instead only formed a small consolidation or intraday continuation pattern);
-low volatility readings, based on such statistical measures as standard deviations or historical volatility ratios or indexes;
-large opening gaps (caused by a large imbalance between buyers and sellers);
-runaway momentum (markets with no resistance above in an uptrend or no support below in a downtrend. This condition differs from the above setups in that volatility has already expanded. In a momentum market, however, the huge imbalance between buyers and sellers continues to expand the trading range!) ...
http://www.traderslog.com/capturing-trend-days.htm
