You got (the very badly named) ii and jj reversed. find() returns [rows, columns] which is [y, x]. You plotted ii,jj which is y,x, not x,y like you incorrectly assumed, so you're plotting the transpose. Don't worry, confusing row,column with x,y is a very very common mistake. Try this:
[rows, columns] = find(IM>4000);
plot(columns, rows, 'ro');
Or better yet, just create an image with red pixels instead of plotting circles in the overlay.
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