After the break

What you do once a level has been closed through: relabel the swings that follow, and treat a pullback as part of the new trend rather than the end of it.

A break is not the end of the work. The chart now has a new sequence, and it has to be labelled as one.

Relabel from the break

The uptrend on gold broke with a close at 2,415, below the swing low of 2,420.

From that candle on, every new swing gets read against the ones after the break, not against the old uptrend.

Figure 1 · A gold uptrend broken by a close at 2,415, with the swings that follow relabelled as lower highs and lower lows

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