Have We Found a Bottom?
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Good morning folks, and welcome to the Rude Awakening!
The question of today is…
Has the Market Found a Bottom Yet?
We are trying to find some buying support today…
Looking at our stochastics, they are starting to move up some.
If we look at the chart for SPY (which is the index tracking the S&P 500) you’ll see an interesting looking candlestick.
We’ll get into that in a moment, but first…
A quick refresher on an important fundamental in chart analysis…
Candlesticks and Hammers
In technical analysis speak, candlesticks are the longer rectangles you see pictured below.
Red ones indicate down days (bearish: the open was the top of the box, the close was the bottom). Green ones indicate up days (bullish: the open was at the bottom of that box, the close was at the top).
And the tips at the top are the day’s high, while the tips at the bottom are the day’s low.
If you look at the SPY chart for the day yesterday, you will see a candlestick that resembles the one boxed off in the image below.
That’s referred to as a hammer.
What it tells us is that even with all the weakness we see in that security throughout the trading day, it closed higher than it opened.
Hammers are bullish indicators.
An interesting stock we’re seeing take this pattern is…
Interactive Brokers Group, Inc. (NASDAQ: IBKR)
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But to wrap up today’s Rude Awakening, I’ll leave you with the question we can hope to answer this week… has the market found a new bottom?
If so, we can start to breathe a bit easier…
But again, smart traders can pull profits from any market. You just have to keep playing it as it comes.
That’s it for today.
Editor, Rude Awakening