The Stock Market Academy

Share this post

Market Hammers Out Bottom as Fear Peaks

www.thestockmarketacademy.com

Market Hammers Out Bottom as Fear Peaks

Today the market rallied off the lows, and fear seems to have peaked.

Hanna Kassis
May 2, 2022
Share this post

Market Hammers Out Bottom as Fear Peaks

www.thestockmarketacademy.com

If you’ve noticed, I end all my weekend posts with “what to look for” this week.

As always, I say we need to look for a candlestick reversal. In Sunday’s post, I stressed the importance of a candlestick reversal on ALL three indices. Today we got that, with the VIX confirming.

The Volatility Index (VIX) signaled a bottom is in, because “fear has peaked”. This was the confirmation I was waiting for to trade more aggressively.

Here is a quick look at the chart. See how crystal clear each candlestick pattern is?

Dow Jones Hammer (Daily)

S&P 500 Hammer (Daily)

NASDAQ Piercing Pattern (Daily)

VIX Shooting Star (inverse of a Hammer; Daily)

Notice every time the VIX peaks, the market rallies?

  • Early December peak fear = rally

  • Late January peak fear = rally

  • Late February peak fear = rally

  • Early May peak fear = rally?

To learn more about how reliable the VIX is with spotting reversals, check out this post, Buy the True “Dip” With This Powerful Chart.

Now is a great learning opportunity to see the potential power of candlesticks.

Final Thoughts

Expect a tradable rally into the Fed announcement Wednesday, as all three indices confirmed one another, and those confirmations were further confirmed by the VIX.

Happy Trading 😊

Share this post

Market Hammers Out Bottom as Fear Peaks

www.thestockmarketacademy.com
Comments
TopNewCommunity

No posts

Ready for more?

© 2023 Segway Financial, LLC
Privacy ∙ Terms ∙ Collection notice
Start WritingGet the app
Substack is the home for great writing