Hi stock market friends. Quick intraday post here.

As I type this, there is a major buy signal brewing on JP Morgan ($JPM):

Price is currently trading outside of Bollinger bands on the 4 hour, daily and weekly charts.

This means the likelihood that price “Reverts” back to the mean is very, very high.

In this case, that would be a move up.

What This Means for JPM Stock:

Recall that Bollinger Bands (the blue lines above and below price) represent +/- 2 standard deviations from the historical average. Price is trading in the “tails” of the statistical bell curve. Remember stats from high school?

The likelihood price stalls, finds a floor, and reverses UP to the historical average is super high.

• The mean (average) is the dashed blue line in the center of the charts below.

• The blue lines above and below price represent +/- 2 standard deviations from the mean.

• Remember, 87% of all price movement occurs within the blue Bollinger bands, so when we see price outside, you should be looking for a reversal.

JPM Price on 4 hour

JPM Price on Daily

JPM Price on Weekly

Final Thoughts on a JPM Bounce

Watch this one closely. Buying now is aggressive; waiting for an intraday or intraweek reversal will give you confirmation.

Outside of any catastrophic news, price will likely see a very nice bounce.