1. The gap up failed yesterday to hold.

  2. The gap down today held.

  3. The 5 day ema crossed under the 10 day sma yesterday.

  4. Over the past two days volatility has expanded to trading in a $168-$164 price range.

  5. Seven straight days of ugly bearish candlesticks.

  6. In the past 5 days price has been under the 10 day sma at some point in the trading day.

  7. Prices are still elevated far above the 50 day and 200 day sma with plenty of room to correct.

  8. And this candlestick chart pattern developed today>>

A bearish island reversal is a chart formation where there is a gap on both sides of the candle. An island reversal can be defined as a compact trading activity within a range of prices, separated from the move proceeding it; this separation is caused by an exhaustion gap and the subsequent move in the opposite direction occurs as a result of a breakaway gap. Island reversals frequently show up after a trending move is in its final stages. It is an extremely good indicator of a reversal of primary or intermediate trend. As soon as it appears, it indicates that there has been a possible extreme change in the current market sentiment. An island reversal gets it name from the fact that the candlestick appears to be all alone, as if on an island. A key sign of a valid island reversal is an increase on volume on both the first gap, and then the subsequent gap in the opposite direction. An island reversal formation is often attributed to news driven events that occur in the pre-market or after-hours trading, but not always.  The trading activity may last for only a single day or a couple of days. When this arrangement occurs for only a single day, it is known as “one day reversal.