Market Bottoms Have a Signature. It's Called Capitulation.
Big market bottoms tend to look the same on a chart, which is useful for buyers hunting the turn and painful for the last holders who sell into it.
- The setup is a long grinding downtrend where almost everyone holding is losing money.
- The turn shows up as one huge down-and-back-up candle: price craters, then closes strong.
- That candle usually comes with the heaviest trading volume on the chart.
- Heavy volume means the last discouraged holders dumped all at once and bigger buyers took everything they threw away.
Outlook: When that pattern shows up, it often marks a major bottom and the start of a longer upswing.