What it means
A rounded bottom (or saucer bottom) is a gradual, multi-month transition from downtrend to uptrend, forming a wide U-shape on the chart. No sharp inflection — supply and demand gradually rebalance. Often follows extended bear markets. The right side of the U is typically tradeable as an emerging uptrend before any clear breakout.
Why it matters
Rounded bottoms mark MAJOR market lows historically — the 1932 SPX low, the 1974 low, the 2009 low all had rounded characteristics. V-shaped bottoms are more common but rounded bottoms tend to be more durable. Less reliable for individual stocks; most reliable on indexes and broad sector ETFs.
How to use it
Identify on weekly/monthly charts. Volume signature: heavy at the bottom (capitulation), declining through the U-trough, expanding as the right side begins. Entry on the rim breakout with volume. Stop below the right-side support pivot. No specific measured target — manage as a major trend trade.
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