Stock Market Analysis

Tuesday, August 11, 2015

Called The Dead Cat Bounce...

This was what I wrote to my market analysis subscribers (for only $5 a month!) yesterday...

"Which means, I am of the opinion that this is nothing more than a dead cat bounce which you should be using to exit any call positions that you may still be holding. Supporting my sentiment is a HUGE dip in the total equities put call ratio from 1.23 to just 0.56. This is saying that options traders turned from very bearish to extremely bullish in just one day, which, in the historic behavior of this indicator, simply means its overdone.

This means that tomorrow will most likely see the market take back alot or all of these gains. In fact, major index futures are already pointing downwards."
 
And as expected, the market did take it all back... and more... index futures are already pointing downwards sharply. Were you stuck in that dead cat bounce? Or did you take advantage of it like my Master's Stock Options Picks Subscribers did and pre-positioned for the downside?
 
In fact, today's market action made that dead cat bounce yesterday look like it never existed; bond yields were back down, total equities put call ratio are back up... everything looked like yesterday never happened. Exactly how I expected it to be. In fact, such a failure further reinforced the bearish sentiment in the market and made it more likely that the market is going to slip into that valley from this point forward. 

Market Crash Timer: YELLOW

For now, the market remains in short term bear trend within an intermediate neutral trend and primary bull trend.

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