V-bottoms are a fairly rare formation in technical analysis and usually signal some sort of artificial interference in the progress of the market. For example, the V-bottom which occurred in the S&P500 index in 2009 was caused by the massive quantitative easing undertaken by the US Federal Reserve Bank in a effort to counter the sub-prime crisis. The S&P made another perfect “V” bottom on 24th December 2018. President Trump’s government shut down caused the S&P to fall heavily in December month – which is very unusual because most investors are away on holiday at this time. When investors returned from holiday, they bought the S&P up strongly on bargain-hunting causing a “V” bottom. Consider the chart:


V-Bottom Formation

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