📈 Piercing Pattern

The market gave us a sign yesterday.

Piercing Pattern

The stock market gapped down to start the week, but saw strong buying during trading hours.

This gave us a piercing pattern, which can be powerful.

Piercing patterns occur when you gap down on the market and then see buying all day, with a close piercing the previous bearish bar.

This is exactly what we have in the S&P 500.

Does it mean we have a bottom in? No.

However, it is a start. And it’s something to keep an eye on as we move forward in the trading week.

Bullish Divergence

Another sign that I saw intraday was that we are developing a bullish divergence if you examine RSI on a 4-hour chart.

It’s very clear on both the Nasdaq and the S&P 500:

Again, this does not mean the bottom is in.

But, if you compare it with the bottom that we found in 2022, it looks awfully similar. Take a look back at how RSI marked the bottom of the market in 2022:

The market is giving us technical indicators that we can’t ignore. Watch this video for a much deeper breakdown of the technicals: