Hey, Ross here:
After a punishing pullback that’s about to enter its third month, the S&P 500 is now back where it was in early June.
But yesterday’s price action could herald a market bounce – the Chart of the Day explains why.
Chart of the Day
This is a chart of the S&P 500. Two things to notice here.
The first is the candle formed by yesterday’s price action. It’s called a hammer candlestick, because the candlestick body is short (i.e. looking like a hammer head) while it has a long lower shadow (i.e. the hammer handle).
Hammer candlesticks happen after a downtrend and are considered signals for a reversal pattern.
And as you can see, yesterday’s hammer candlestick also formed at a long-term trendline which connects the March 2023 lows AND the October 2022 lows.
The next move to watch for is whether the S&P 500 will be able to maintain this trendline or not.
If it does, that’s a good sign. If it breaks to the lower side, however, there could be more pain ahead.
Insight of the Day
The best opportunities will happen right at the beginning of a market reversal.
Yes, it’s always smart to let the price action confirm the trend before making a move.
But the most lucrative opportunities always happen at the beginning of a new trend.
So if the market is about to reverse, inaction is costly.
That’s why I’m going LIVE tomorrow at 12 p.m. Eastern to show you my #1 strategy for taking advantage of any potential reversal.
This strategy has already been responsible for multiple fast high double – and even triple – digit gains this year.
So you don’t want to miss it.
And I’ll explain everything tomorrow.
Embrace the surge,
Editor, Stock Surge Daily