How to Identify it
· First day is a long white day
· Second day is a small day that gaps in the direction of the previous trend
· The third day is a black day
What it Means
In an uptrend, the market builds strength on a long white day and gaps open on the second day. However, the second day trades within a small range and closes at or near its open. This scenario generally shows an erosion of confidence in the current trend. Confirmation of the trend reversal is the black third day.