Anatomy of a Market Bottom

PRICE TERRAIN · PHASE: FULL CYCLE

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Phases of a bottom

Select a phase to highlight it on the terrain and read its hallmarks. A "meaningful" bottom usually shows all five in sequence over weeks to months — not a single green day.

Phase-spotting quiz

Which phase does this mini pattern most resemble?

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Hallmarks of a meaningful bottom

Capitulation volume: the flush day often prints multiples of average volume — forced sellers exhaust themselves.
Time: major bottoms are built, not printed. Accumulation ranges historically run weeks to months (2002-03 and 2008-09 each took months to base).
Volatility compression: daily ranges shrink inside the base as supply and demand equalize.
Higher lows into resistance: each dip is bought sooner — the range floor rises before the ceiling breaks.
Reclaim and retest: price breaks the range top, then holds it as support on lighter selling.

Traps that fool the newly bullish

Dead-cat bounce: sharp rallies of 5-20% are routine inside downtrends; 2000-02 had several 20%+ rallies on the way to -78% for the Nasdaq.
First green candle syndrome: one strong day after a decline is statistically noise, not a regime change.
Catching knives: buying the fastest part of the decline mistakes velocity for value.
V-bottoms exist (March 2020) but are the exception, usually forced by an external shock reversing — you cannot assume one in advance.
Sentiment alone is not a signal: crowds turn bullish many times during a bear market; only price structure plus volume confirms.