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Definition

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:
<center>
<figure class="figure"><a class="lightbox" href="/onlinecourse/img/glossary/V-BOTTOM-SP.png" data-plugin-options="{'type':'image'}"> <img class="figure-img img-fluid" src="/onlinecourse/img/glossary/V-BOTTOM-SP.png" /></a>
<figcaption class="figure-caption">V-Bottom Formation</figcaption>
</figure>
</center>
 Subsequently in March 2020, the corona pandemic caused an initial "V-bottom" as investors became aware of the global economic implications. As the impact of the pandemic became clearer and investors were better able to assess its effects, the markets recovered rapidly, leading to a V-bottom. Consider the chart: 
<center>
<figure class="figure"><a class="lightbox" href="/onlinecourse/images/V-Bottom.png" data-plugin-options="{'type':'image'}"> <img class="figure-img img-fluid" src="/onlinecourse/images/V-Bottom.png" /></a>
<figcaption class="figure-caption">S&P500 Index: January 2020 - October 2021. Chart by ShareFriend Pro</figcaption>
</figure>
</center>

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