Bingo, MrPhil!! Momentum and reversals are often seen as new higher highs and higher lows are created. Actually I tried to design a system which would avoid buying into a sell off continuation pattern.
On such a pattern, new lower lows and new lower highs continue for quite some time. As a good example look at PSEC from X-10 last month applying GLAD. There was no entry point as the sell off continued right up until X-1. (Now for others PSEC is not to be traded inside of X-6 but you see the pattern I am describing).
Many times GLAD keeps you from buying at the highs in a sell off market...that was really my intent, but you are a good observer of the machinations of this mad trader's mind...as many times you do actually see the beginnings of a run higher as new higher highs and higher lows begin.....;-)