For the past 40 days, tariff-related uncertainty has shaken the markets, pushing the S & P 500 into a correction. In times like these — when headlines are filled with fear, talk of 20% drops, or looming recessions — technical analysis serves as a powerful anchor. It removes emotion from the equation and allows you to trade based on clear signals. When a setup presents itself, you enter the trade. If that setup is invalidated, you exit. While markets are currently sitting at a critical support level, and any breakdown could trigger another leg lower, it’s essential to remain objective. Let’s analyze the S & P 500 using SPY ETF as a proxy, under the key assumption that the correction has run its course. If this proves true, and the broader index begins to recover, a rising tide could lift all boats — making this a foundational piece to examine before looking at individual trade setups. Spotting a double-bottom pattern On the 6-month daily chart of SPY, an ETF that tracks the S & P 500, there’s a clear, objective pattern that can help determine whether the recent sell-off has run its course—it’s known as the double bottom pattern. This same formation is often seen not only at market lows but also when markets begin to top out. For it to signal a valid reversal, a couple of conditions must be met: • Price action should revisit a previous low and then bounce back, forming the second leg of the “W” shape. • At the same time, the RSI (Relative Strength Index) should form a higher low, creating a bullish divergence. This divergence suggests that while price may have retested the lows, momentum behind the move has weakened, signaling a potential trend shift. This is precisely the setup unfolding on SPY’s chart, supporting the idea that the correction may be ending and a bullish reversal could be underway. For this trade, I’m drawing confirmation from three technical indicators that support a potential bullish setup in Apple (AAPL) : • RSI (Relative Strength Index): RSI is a widely used momentum indicator. When it drops below 30, it signals oversold conditions, often prompting traders to look for a possible reversal. The key confirmation comes when RSI climbs back above 30, indicating a shift in momentum. That’s exactly what’s happening with AAPL right now. • Price Action (Ascending Price Channel): Since bottoming out on March 13th, AAPL has reversed course. The recent price action shows a clearly defined ascending channel, with higher highs and higher lows forming—a classic sign of bullish momentum. • MACD (Moving Average Convergence Divergence): A reliable indicator for trend changes, MACD crossover occurs when the blue MACD line crosses above the yellow signal line. This crossover, now visible on AAPL’s chart, is often seen as confirmation of a trend reversal in progress. The Trade Setup: AAPL 220-225 Bull Call Spread To express a bullish outlook on AAPL, I’m deploying a bull call spread options strategy. With AAPL trading around $222 at the time of writing, I’m structuring the trade by buying a $220 call and selling a $225 call as one combined position. If AAPL closes at or above $225 by April 25th, this trade will deliver a 100% return on the capital risked. This setup offers a way to capture upside potential from a rebound while maintaining a defined and limited risk-reward profile. Here is my exact trade setup: Buy $220 call, April 25th expiry Sell $225 call, April 25th expiry Cost: $250 Potential Profit: $250 I explore a rules-based trading system in depth in my book, Mean Reversion Trading , and continue to expand on through resources and analysis at https://tradingextremes.com . -Nishant Pant Founder: https://tradingextremes.com Author: Mean Reversion Trading Youtube, Twitter: @TheMeanTrader Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles, and Dan Ives, with a special edition of Pro Talks with Tom Lee. 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