Market might hit the bottom last week. Current rebound many thought of as "dead cat bounce" as lack in volume. It could be a "dead cat bounce" and could be also a real rebound hence confirmed last week was indeed the bottom.
To track whether it is a real rebound technically there are 2 ways.
1. Monitor for higher low ( price of stocks or index ) behavior. The next pull back should not be lower than the previous pull back ( never mind how high the rebound went ). A successive 2 higher low more or less confirm market was bottom last week.
2. If no higher low was observed but rather when pull back hit the same low spot. Next use indicator such as RSI or Stochastic to check for possible positive divergence. Price/Index hit the same low spot but RSI/Stochastic is forming a higher low instead, that is the sign of positive divergence and in general is a bullish sign.
During these period of higher low or positive divergence, the index/price might develop into a symmetrical or an ascending triangle formation. Symmetrical triangle will have a lower high and higher low pattern whereas ascending triangle will have a upside being capped at a fixed level. Ascending triangle is bullish in nature. Symmetrical triangle is a continuation of the previous trend. The breakout from these triangles will form a new trend. Typically triangle pattern could take few weeks to few months to form before breakout from it.
