Your test is for day1 being less than or equal to half, but half is only being given a value when the current bar is entirely contained within the range of the previous bar. Since half is static, it retains its value and you are still checking for day1 <= half even when the current bar is not entirely contained with the range of the previous bar.

A RealCode Condition which both changes static to dim and only test if day1 <= half when price.High <= price.High(1) And price.Low >= price.Low(1) could be written as:

Dim day1 As Single = price.High - price.low 'range of first day
Dim day2 As Single = price.high(1) - price.Low(1) 'range of previous day
' if the first day's high is lower than the second day's high and 
' the first days low is higher than the second days low 
' then divide the range of the second day in half.
If Price.High <= Price.High(1) AndAlso Price.Low >= Price.Low(1) Then
	Dim half As Single = day2 / 2
	' if the range of the first day is less than half the range of the second day then pass
	If day1 <= half Then
		Pass
	End If
End If

It obviously helps to know what you are doing.  I really appreciate your assistance.  Thank you very much.  

You're welcome.