9 Minute Read

Tackle Today: The evolution of a market bottom

June 2, 2022

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«Price action tells the tale.»

Traders,

Yesterday we looked at how time can help you differentiate between “a” bottom and “the” bottom. Said another way, short-term lows in the market can become long-term lows with time. But price, or more precisely, price appreciation, is also needed.

Every minor pivot low has the potential to grow into a major one if the price increases enough afterward. The more resistance zones give way following a pivot low, the more significant it becomes.

Weak pivots or bottoming attempts don’t result in price breaking above any resistance zones.

Major pivots or bottoming attempts result in price breaking above minor and major resistance zones.

After the March 23rd, 2020, bear market bottom, the price of SPY proceeded to blast through every resistance zone until it reached an all-time high. As each ceiling cracked, it became more and more apparent that what began as a minor pivot was, in fact, a major, bear-ending pivot.

Could the recent pivot low of $380.54 grow to become as significant?

Certainly. It’s already felled one ceiling so far ($410). Let’s see if it can blast through more.

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Video of the Day: How to place a swing trade using the Stock Report

Check out this solid swing trade setup on $KOS from Tackle’s Stock Report and watch Coach D. show you how to set up proper entry and exit orders using 1st triggers OCO bracket order in Thinkorswim.


Chart of the Day: How the SPY Reversal will Grow

Chart of the Day: How the SPY Reversal will Grow

SPY has broken one resistance zone so far. Four more must be cleared for us to return to a new high. With the break of each one, the significance of last week’s low ($380.54) will grow.


Today’s line up

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Halftime Report 12:30 PM EST

The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day, and fun in a way that only Matt and Tim can deliver.


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