The Dow bullish percents give the best indication a bottom is in place with its flat-line action. Prior flat-lines, particularly in conjunction with a falling Dow, have been decent long side entry points. The current situation would suggest a similar long-side play is available.

When one looks at the Dow there are indications a bounce is on the cards. The bullish harami cross is one of the most consistent bullish reversal candlesticks; a stop on a break of the 2-day low gives adequate protection to the downside with an entry on a break of yesterday's high. Oversold stochastics lend additional bullish weight to this candlestick-combo.

How this plays out on the Diamonds (DIA):

Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website