The market had a ferocious bounce this afternoon after being down a lot this morning (10/8/14). This bounce brought out all the bulls (again) and sent the bears into hibernation. But, is that it? Is the correction over? No one knows for sure, but here are three things that you should be on the look-out for for the rest of the week to help determine if this truly was ‘The Bottom’
1. High probability Long Set Ups Return (vanished a couple weeks ago)
2. The stocks that bounced the most and held up the best ‘tighten up’ and the price contracts
- This is also known as commitment, stocks need to show this if the bulls want to make this the bottom
- Often times this sort of price commitment is best shown through the creation of a bull-flag pattern
3. The Russell 2000 ($IWM) needs to immediately show follow through to this move higher to negate the massive (potential) topping pattern
So, as we head into the final half of this week, keep in mind these three vital things that bulls NEED to see in order for this to be the bottom in the market.