a. Define an inside day, outside day, narrow-range day, and wide-range day. Which of these days represents increasing volatility, and which represents contracting volatility? Explain your answer.
b. Schwager (1996) states that the one-day reversal pattern "successfully call(s) 100 out of every ten highs." What does he mean by this statement, and what is the implication for traders using these reversal patterns?