Stock Market Analysis

Monday, August 31, 2015

Dead Cat Bounce Completed?

The US market closed slightly negative today in what seemed like the completion of that "Dead Cat Bounce" I spoke of last week. Were you one of those who jumped on this "Bull Trap" (A small rebound within a bear trend that lures traders with a bullish outlook in just to be slaughtered when the bear trend resumes) or were you one of the smart ones who were prepositioned today for the coming downside like one of my Master's Stock Options Picks Subscribers?

With extremely heavyweight economic data coming this week in the form of the ISM index tomorrow and the Jobs report on Friday, we could see significant volatility in the market and if the recent trend in economic data is any guidance, this week's reports could turn out slightly disappointing, thereby hastening the completion of the dead cat bounce and the confirmation of this intermediate bear trend and hence, in my personal opinion, the bear market aka market crash.

In fact, Jim Cramer himself also warned investors to be prepared for more downside this week. Looking at the behavior of the ISM index, a lower month usually gets followed up by another lower month and with last month's lower number, odds are that tomorrow's ISM index might turn out disappointing especially with consensus expecting a higher number. That could just start the market sliding once again.

Bond yields were also once again at recent highs, reducing the incentive for investors to continue going into equities. Total equities put call ratio continue to be persistently bearish. Under such conditions, the odds are clearly stacked against the bulls but how should a trader turn this into executable information? How do you actually profit from this? Hurry and join my Master's Stock Options Picks service now!

Market Crash Timer: Orange

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

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