Chart of the Day - Tuesday, September 22nd, 2020

Today’s Chart of the Day was shared on Twitter by Nautilus Research (@NautilusCap). The S&P 500 printed a bullish hammer candle on the daily chart yesterday. Hammer candles are formed when price falls significantly after the open, only to claw back those losses and close at the upper end of its range. They often mark a trend reversal. Nautilus points out that the forward returns for the S&P 500 have been positive when these hammer reversals occur above the 1-year moving average. According to their data, six months later,  the S&P 500 was higher 87.5% of the time for an average gain of 8.56%. You know what they say - you'll need a good hammer if you want to nail in a bottom!