How to Determine a Market Bottom

[] Today's market commentary from TradingPub is here! To view this email as a web page, go [here.]( To view this email as a web page, go [here.]( [] [] [] [Join legendary trader Tom Busby]( at 8 p.m. ET TONIGHT for the premaket signal he’s used for 30 years to find the day’s strongest stocks [] How to Determine a Market Bottom I received an interesting question Tuesday... A reader tracked me down and asked me to define a term that is quite common in our financial markets. “What is a market bottom? Is that when one should buy stocks, expecting a rise to follow?” It’s a great fundamental question… and today we’re going to answer it and, more importantly, how to spot it. Understanding bottoms can provide investors with opportunities to go long on equities, and recognize the best way to trade around stocks you want to own at a price you want to pay. What is a Market Bottom A "market bottom" refers to the lowest point reached by a financial market or asset during a specific time period. By definition, this is the opposite of a “market top,” which is the highest point in the market cycle. We use this term to discuss movements in equity, commodity, currency and other markets. If we look at this price chart of the last four decades, we can see that market bottoms happened during the first Gulf War, after the Dotcom Crash, and after the Great Financial Crisis. Markets also bottomed out in March 2020 after the COVID-19 crisis drove the S&P 500 down 33% in a month. [] A market bottom is important because it signals that the downward trend is coming to an end. That could fuel significant upside due to a reversal or mean reversion. Investors and traders often look for signs of a market bottom to identify potential buying opportunities, anticipating that prices may start to rise from that point. What Drives a Market Bottom? Various factors can contribute to a market bottom, and for most investors, they’re usually discovered in hindsight. These factors could include economic indicators, stronger corporate earnings, and shifts in investor sentiment. I prefer to look at a few other elements. For example, I pay very close attention to the actions of the Federal Reserve. After the Dotcom crash, for example, the Federal Reserve began to cut interest rates and buy assets on its balance sheet. This process of quantitative easing has been a major factor in market reversals over the last two decades. QE was essential to the market finding a bottom in March 2009, December 2018 and March 2020. The Fed has pumped significant amounts of capital into the financial markets by purchasing bonds and mortgage backed securities across multiple rounds of easing. This liquidity is essential to the stability of the markets. But it creates dramatic incentives for capital to flow into risk assets — including stocks that possess extreme valuations or a lack of profitability. Of course, it’s not just the Fed that engages in QE. Last October, the markets witnessed a period of easing by the People’s Bank of China, the Bank of Japan, and the Bank of England. The latter sought to contain a crisis in its bond markets after liquidity challenges hammered the nation’s pension system. That period coincided with what Michael Howell at Capital Wars has referred to as the bottom of a liquidity cycle in the markets. The chart below shows the bottom of a long-term liquidity cycle, according to CrossBorder Capital. [] Other Ways to Spot a Bottom It’s very difficult to spot the bottom of the market as it’s happening. A lot of investors typically reach a period of “extreme fear” and aren’t eager to buy in an extreme crisis. So, it’s important to watch other factors, like those linked to fundamentals or technical analysis. I always recommend that investors look for short-term market bottoms by paying close attention to the daily reading of the Money Flow Index and the Relative Strength Index. When both reach oversold levels (MFI under 20, RSI under 30), investors should look for short covering and dip buying among institutions and algorithmic traders. We can see in the chart below that the S&P 500-tracking SPY ETF hits a short-term bottom and reverts after the RSI and MFI both hit oversold territory at the same time. [] There is one more important, contrarian indicator that investors can follow... It’s what we follow at [Executive Payouts Unlimited]( every day. We’re talking about the buying patterns of executives in their own stocks. The following chart is a measure of insider buying to selling in dollar terms. At the top of the chart sits the strongest insider buying (blue line) over the last 15 years. Those strongest levels coincided with major market bottoms in 2009, 2011, 2015, 2018, 2020 and 2022. [] Insider buying is a terrific signal because it combines the collective wisdom of leadership at major public companies that believe their individual stocks will climb. When insider buying picks up — as it did in October 2023 — we want to be actively trading or buying stocks over the long term. The best way to get started is joining [Executive Payouts Unlimited](. There, you’ll get insight into the best way to take advantage of market momentum and insider buying activity. [] Chat soon, Garrett {NAME} *This is for informational and educational purposes only. There is an inherent risk in trading, so trade at your own risk. [] _______________________________________________ [] Be Sure to Join this 30-Year Market Pro for His No. 1 Premarket Signal Lance Ippolito joined trading legend Tom Busby this afternoon as he revealed the stock market’s best-kept secret — LIVE! [And tonight, he’s doing it all over again!]( Lance won’t be there, but if you missed the worldwide debut this afternoon, you cannot miss this! Not only will Tom share his midweek market update at 8 p.m. ET TODAY, Nov. 15… But he’ll also reveal the premarket candlestick buy signal he has relied on for THREE DECADES! This pattern reveals what could be the day’s strongest stocks before the market even opens… [So Join Tom at 8 p.m. ET TONIGHT]( [] _______________________________________________ [] Market Momentum is GREEN We’re back in positive territory after a very choppy few weeks, and inflation data continues to signal that the Fed will start cutting interest rates in 2024. Markets are betting on a rally. But as I warned yesterday, pay very close attention to overbought territory in the Technology sector (XLK). *This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk. [So Join Tom at 8 p.m. ET TONIGHT]( [] Want to get a link to my TradingPub articles as soon as they post? I’ve got you covered! Telegram is an entirely free messaging app and getting access is as easy as 1… 2… 3… 1. Download Telegram on your mobile device (Before you can add Telegram to your desktop computer, you must download the application on your phone and create your account: To download to your iPhone, [click here](. To download to your Android device, [click here](. After the download is complete, please create an account. NOTE: You can manage your privacy settings by clicking “Settings,” and then “Privacy & Security.” 2. Download Telegram on your desktop: Once you’ve downloaded Telegram onto your mobile device and created your personal account, you can download it onto your desktop computer. To download onto your PC, [click here](. To download onto your MacOS, [click here](. 3. Then add the Garrett {NAME} channel and you’re set: [9_jjnFuAvno0MjNh]( See you there! Garrett [] Join the Conversation [] [] [] [Join legendary trader Tom Busby]( at 8 p.m. ET TONIGHT for the premaket signal he’s used for 30 years to find the day’s strongest stocks [] How to Determine a Market Bottom I received an interesting question Tuesday... A reader tracked me down and asked me to define a term that is quite common in our financial markets. “What is a market bottom? Is that when one should buy stocks, expecting a rise to follow?” It’s a great fundamental question… and today we’re going to answer it and, more importantly, how to spot it. Understanding bottoms can provide investors with opportunities to go long on equities, and recognize the best way to trade around stocks you want to own at a price you want to pay. What is a Market Bottom A "market bottom" refers to the lowest point reached by a financial market or asset during a specific time period. By definition, this is the opposite of a “market top,” which is the highest point in the market cycle. We use this term to discuss movements in equity, commodity, currency and other markets. If we look at this price chart of the last four decades, we can see that market bottoms happened during the first Gulf War, after the Dotcom Crash, and after the Great Financial Crisis. Markets also bottomed out in March 2020 after the COVID-19 crisis drove the S&P 500 down 33% in a month. [] A market bottom is important because it signals that the downward trend is coming to an end. That could fuel significant upside due to a reversal or mean reversion. Investors and traders often look for signs of a market bottom to identify potential buying opportunities, anticipating that prices may start to rise from that point. What Drives a Market Bottom? Various factors can contribute to a market bottom, and for most investors, they’re usually discovered in hindsight. These factors could include economic indicators, stronger corporate earnings, and shifts in investor sentiment. I prefer to look at a few other elements. For example, I pay very close attention to the actions of the Federal Reserve. After the Dotcom crash, for example, the Federal Reserve began to cut interest rates and buy assets on its balance sheet. This process of quantitative easing has been a major factor in market reversals over the last two decades. QE was essential to the market finding a bottom in March 2009, December 2018 and March 2020. The Fed has pumped significant amounts of capital into the financial markets by purchasing bonds and mortgage backed securities across multiple rounds of easing. This liquidity is essential to the stability of the markets. But it creates dramatic incentives for capital to flow into risk assets — including stocks that possess extreme valuations or a lack of profitability. Of course, it’s not just the Fed that engages in QE. Last October, the markets witnessed a period of easing by the People’s Bank of China, the Bank of Japan, and the Bank of England. The latter sought to contain a crisis in its bond markets after liquidity challenges hammered the nation’s pension system. That period coincided with what Michael Howell at Capital Wars has referred to as the bottom of a liquidity cycle in the markets. The chart below shows the bottom of a long-term liquidity cycle, according to CrossBorder Capital. [] Other Ways to Spot a Bottom It’s very difficult to spot the bottom of the market as it’s happening. A lot of investors typically reach a period of “extreme fear” and aren’t eager to buy in an extreme crisis. So, it’s important to watch other factors, like those linked to fundamentals or technical analysis. I always recommend that investors look for short-term market bottoms by paying close attention to the daily reading of the Money Flow Index and the Relative Strength Index. When both reach oversold levels (MFI under 20, RSI under 30), investors should look for short covering and dip buying among institutions and algorithmic traders. We can see in the chart below that the S&P 500-tracking SPY ETF hits a short-term bottom and reverts after the RSI and MFI both hit oversold territory at the same time. [] There is one more important, contrarian indicator that investors can follow... It’s what we follow at [Executive Payouts Unlimited]( every day. We’re talking about the buying patterns of executives in their own stocks. The following chart is a measure of insider buying to selling in dollar terms. At the top of the chart sits the strongest insider buying (blue line) over the last 15 years. Those strongest levels coincided with major market bottoms in 2009, 2011, 2015, 2018, 2020 and 2022. [] Insider buying is a terrific signal because it combines the collective wisdom of leadership at major public companies that believe their individual stocks will climb. When insider buying picks up — as it did in October 2023 — we want to be actively trading or buying stocks over the long term. The best way to get started is joining [Executive Payouts Unlimited](. There, you’ll get insight into the best way to take advantage of market momentum and insider buying activity. [] Chat soon, Garrett {NAME} *This is for informational and educational purposes only. There is an inherent risk in trading, so trade at your own risk. [] _______________________________________________ [] Be Sure to Join this 30-Year Market Pro for His No. 1 Premarket Signal Lance Ippolito joined trading legend Tom Busby this afternoon as he revealed the stock market’s best-kept secret — LIVE! [And tonight, he’s doing it all over again!]( Lance won’t be there, but if you missed the worldwide debut this afternoon, you cannot miss this! Not only will Tom share his midweek market update at 8 p.m. ET TODAY, Nov. 15… But he’ll also reveal the premarket candlestick buy signal he has relied on for THREE DECADES! This pattern reveals what could be the day’s strongest stocks before the market even opens… [So Join Tom at 8 p.m. ET TONIGHT]( [] _______________________________________________ [] Market Momentum is GREEN We’re back in positive territory after a very choppy few weeks, and inflation data continues to signal that the Fed will start cutting interest rates in 2024. Markets are betting on a rally. But as I warned yesterday, pay very close attention to overbought territory in the Technology sector (XLK). *This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk. [So Join Tom at 8 p.m. ET TONIGHT]( [] Want to get a link to my TradingPub articles as soon as they post? I’ve got you covered! Telegram is an entirely free messaging app and getting access is as easy as 1… 2… 3… 1. Download Telegram on your mobile device (Before you can add Telegram to your desktop computer, you must download the application on your phone and create your account: To download to your iPhone, [click here](. To download to your Android device, [click here](. After the download is complete, please create an account. NOTE: You can manage your privacy settings by clicking “Settings,” and then “Privacy & Security.” 2. Download Telegram on your desktop: Once you’ve downloaded Telegram onto your mobile device and created your personal account, you can download it onto your desktop computer. To download onto your PC, [click here](. To download onto your MacOS, [click here](. 3. Then add the Garrett {NAME} channel and you’re set: [9_jjnFuAvno0MjNh]( See you there! Garrett [] Join the Conversation [] A TradingPub Publication ABOUT US: We believe that the opportunity for financial literacy and freedom belongs to all people, not just those who already have years of investing experience. TradingPub provides an array of educational services and products that will help you navigate the markets and become a better investor. Trading is made simple through our online forum full of trading techniques to give you the best tools to kick-start your investing journey. We offer collaborative webinars and training; we love to teach. No matter the opportunity, we bring together a strong community of like-minded traders to focus on analyzing market news as it’s presented each day. DISCLAIMER: FOR INFORMATION PURPOSES ONLY. The materials presented from TradingPub LLC are for your informational purposes only. Neither TradingPub nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational purposes intended is at the user’s own risk. DISCLAIMER: TRADE AT YOUR OWN RISK; TRADING INVOLVES RISK OF LOSS; SEEK PROFESSIONAL ADVICE. TradingPub is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Trading activity, including options transactions, can involve the risk of loss, so use caution when entering any option transaction. You trade at your own risk, and it is recommended you consult with a financial advisor for investment, legal or tax advice relating to options transactions. Please visit for our full Terms and Conditions. [Unsubscribe]( This email was sent to {EMAIL} by TradingPub 101 Marketside Ave, Suite 404 PMB 318 Ponte Vedra, Florida 32081, United States [] A TradingPub Publication ABOUT US: We believe that the opportunity for financial literacy and freedom belongs to all people, not just those who already have years of investing experience. TradingPub provides an array of educational services and products that will help you navigate the markets and become a better investor. Trading is made simple through our online forum full of trading techniques to give you the best tools to kick-start your investing journey. We offer collaborative webinars and training; we love to teach. No matter the opportunity, we bring together a strong community of like-minded traders to focus on analyzing market news as it’s presented each day. DISCLAIMER: FOR INFORMATION PURPOSES ONLY. The materials presented from TradingPub LLC are for your informational purposes only. Neither TradingPub nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational purposes intended is at the user’s own risk. DISCLAIMER: TRADE AT YOUR OWN RISK; TRADING INVOLVES RISK OF LOSS; SEEK PROFESSIONAL ADVICE. TradingPub is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Trading activity, including options transactions, can involve the risk of loss, so use caution when entering any option transaction. You trade at your own risk, and it is recommended you consult with a financial advisor for investment, legal or tax advice relating to options transactions. Please visit for our full Terms and Conditions. [Unsubscribe]( This email was sent to {EMAIL} by TradingPub 101 Marketside Ave, Suite 404 PMB 318 Ponte Vedra, Florida 32081, United States