Spencer Platt/Getty, Tyler Le/BIThe stock market flashed a bullish technical indicator on Monday, according to Ned Davis Research.NDR strategist Ed Clissold noted the market is its the fourth stage of bottoming as it approaches record highs.Since July, three breadth thrust signals have flashed, indicating a strong market recovery.The stock market just flashed a bullish technical indicator that suggests double-digit gains are in store for the S&P 500 over the next year.That's according to a Wednesday note from Ned Davis Research strategist Ed Clissold, who said the stock market has entered the fourth stage of its bottoming process following its early August sell-off.The stock market fell more than 5% in early August amid a confluence of risks, including a weak July jobs report, a yen carry-trade unwind, and Warren Buffett slashing his stake in Apple.But since then, the S&P 500 has rallied nearly 10% and is just 1% shy of record highs."New breadth thrust signals confirm that the market is in step four of the bottoming process and moving past the recent pullback," Clissold explained, adding that the four stages of a stock market bottom are oversold, rally, retest, and breadth thrusts.On August 19, a new breadth thrust signal flashed, which occurs when the stock market swiftly transitions from very few stocks participating in the upside to many stocks moving higher at the same time."The rationale is that if a few stocks run into trouble, others can propel the popular averages higher," Clissold said.