Take AAPL for example. Below is a daily chart of APPL as of February 2013. AAPL had been down-trending since about September 2012. After five months of down-trending, notice the "higher low" on the bounce down around February 4th.
Prior to that, the lows of the bounces down made lower lows each time. Well, to be honest, it did hit a strong support line around 510 from the middle of November through the middle of Janurary - effectively forming a wedge. Then it broke down out of that wedge around January 14th and returned to making lower lows. So, even though it wasn't making lower lows during that time, it wasn't making higher lows - and that's the point.
So the lesson learned for me is that higher lows on a down-trending stock is a signal to stand back and watch that stock to see what it's going to do. Same thing is true (for me) on an up-trending stock - lower highs is a signal to stand back and watch (V in January 2013 [below] is a good example of the up-trend).
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