«When Bulls Return.»
Traders,
Now that we’ve got an idea of the most common bottoming patterns, let’s take a closer look at the double bottom. It looks like the letter “W” and signals a shift in power from bears to bulls. Let’s break it down.
Downtrends are comprised of lower pivot lows. To form a lower pivot low requires breaking below the previous trough. It’s a feat only accomplished when bears are pressing their advantage and bulls are unwilling or unable to defend the old floor.
But what happens if prices hold the prior low? An equal pivot low forms. It signals a failure of sellers to continue the downtrend. It also signals that downside momentum has stalled, that bulls are putting up a fight at support and are winning. Not all double bottoms result in a massive uptrend. Some simply reveal a momentum shift from down to sideways.
For the downtrend to fully reverse requires a break of resistance. Ultimately, that is what completes and confirms the W formation.
🛑 Upcoming Webinar › Technical Analysis 101: The Art of the Reversal with Coach Matt Justice | April 11th at 8:30 PM EST on YouTube
Join Tackle Trading on the next Technical Analysis webinar where Coach Matt Justice is going to take a deep dive into how price trends reverse. It’s called The Art of the Reversal. You will learn everything you need to know about how to spot, analyze, and trade the various reversal patterns that end (and begin!) trends.
✅ Read the blog here.
✅ Get the FREE e-book here.
Video of the Day: Fundamental Focus – What is Shareholder Payout Ratio?
Coach Greg explains what Shareholder Payout Ratio is and how traders and investors can use this important fundamental concept to create an edge in the stock market.
Chart of the Day: The Energy Sector ($XLE)
Energy stocks are holding firm amid the market selloff. XLE is on the cusp of completing an ascending triangle.
Today’s Blog
Options Theory: Hedging Bull Call Spreads
Today’s video walks through my preferred stop loss and hedging methods for bull call spreads.
Today’s line up
Traders Lounge 11 AM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Cash Flow Club Replay
If you missed last night’s episode when Coach Gino Poore talked about Top-Down approach Using Implied Volatility or would like to watch it again, check it out here.
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.
Financial freedom is a journey
Sign up now and gain unfettered access to all of the quality content and powerful Scouting Reports that our Pro Members enjoy for 15-days absolutely free with no strings attached and let us show you what your trading has been missing.
Legal Disclaimer
Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.
All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.
