I have watched Fast Money for the last time. On Friday they declared that the bottom is in and that a retest of the lows is not needed. They also stated that rising on lower volume is a bullish sign.
Wow, how crazy is that? Volume confirming price is a general rule for technical analysis.
I looked back at some recent corrections and the mild bear market of 2004. While it is true that volume can be light while coming out of a correction, if that correction comes in the midst of a bull market, a retest of the high volume lows almost always takes place. Anytime you see a V-shaped base that is usually a bad sign for the medium to long term. William O’Neil has studied many bases of many stocks and he always says to avoid the V-shaped base. They work sometimes, but have a high failure rate.
I’m showing the correction of 2005, 2006 and the bear market of 2004. Notice the 3 V-shaped bases during the bear market. You will also find many V-shaped bases during the 2000-2003 bear market. Notice also how well the TD-Sequential worked for the two corrections I show below. 
O’Neil is talking about V shaped bases in stocks, not in indexes. I subscribe to IBD. Indexes are notching more new highs to new lows the last couple of days. Good Luck. BAKIN
Careful there backbacon. The date of this post was in August 2007. I was getting very bearish and viewed the rally after the big reversal day as a “sucker’s rally”. I think it is safe to say that the call was a good one.
If a chart pattern is worth recognizing, it should not matter if you are looking at stocks, bonds, pork-bellys, gold, rice, wheat, or even an index. The patterns are a way of recognizing group psychology, which governs all tradable markets. I learned that from Bill O’Neil. The same psychology should apply to both small-cap stock charts and the S&P 500 index.
Thanks for the comment,
Paul