1) In my opinion, it has to do with trading ranges that establish the next upside & downside target upon the breakout from the established range. Imagine a market that has been trading in a range several times from 650 to 700. It has a range, also known as a "measure", of 50. On an upside breakout above 700, you expect the market to make a "measured move" up to 750, i.e. 700+50. On a downside breakout below 650, you expect the market to make a "measured move" down to 600, i.e. 650-50. The range defines the magnitude of the expected breakout. 2) Some people believe that it has to do with retracements that tend to repeat themselves in a trend. For example, a market rallies 5, falls 2, rallies 4, falls 2, rallies 6, falls 2, rallies 3, falls 2. The fall of 2 is the "measured move" that seems to repeat in the trend. The more times it repeats, the more traders get excited about it and make it a self-fulfilling prophecy.
I've always understood a measured move to mean a projected move out of either a range http://charts.dacharts.com/2008-06-19/2008-06-19 16-34 YM #F D.png Came to within 18 ticks or 0.14% of the projection. or a 1-2-3 pattern with a higher low or lower high. http://charts.dacharts.com/2008-06-19/2008-06-19 16-39 NQ #F 10.png Touched it almost exactly. Notice in both cases I used the open/close rather than the absolute highs/lows.