Dead Cat Bounce Starts...
Exactly as I mentioned to paid subscribers yesterday, the market started its dead cat bounce or relief rally today, closing the market positive despite worsening economic data.
(Yes, I only publicly post my report here every other day at best but paid subscribers get my reports DAILY for LIFE... sign up now! Only $99 for LIFE! And it takes only one winning trade to make that back and MORE, you know it!)
This was what I said in yesterday's report to paid subscribers...
"...was the formation of my all time favorite bullish reversal pattern being formed... the Dragon Tail Formation. This is basically a formation consisting of a sharp drop ending with a hammer candlestick that makes the whole formation look like some kind of tail. The Dragon Tail Formation basically signal a short term end to a bear trend and that a short term bull reversal / rebound / dead cat bounce / bull trap is going to start right following this formation."
And indeed it was so. The market turned around on the dragon tail formation once again exactly as it predicted. As I mentioned earlier this week, the second week of each month is typically a technical driven week as traders and investors make sense of the heavyweight economic reports of the first week. This rebound is a direct result of traders accumulating into a grossly oversold condition. In fact, the QQQ was down 7 consecutive days before the dragon tail formation, hows that for grossly oversold... the last time it did such a long stretch was the correction of 2012 and even that signalled the end of that correction. Now, don't get me wrong, this time is different because it happened within the framework of a potential market crash so it would not have the reversal effect it did the last time.
So, the dead cat bounce has started and myself, like so many other renowned analysts, is of the opinion that the market crash would officially begin only after this dead cat bounce has proven it to be a totally dead cat by failing at a critical resistance zone and that should happen within the next few days when the market retests the 20 or 30MA. Very nimble traders could actually use this dead cat bounce for some upside profit or be patient and use it to accumulate more put options at better prices. Of course, successful trading is not about predictions but understanding what condition the market is in at the prevailing moment and watching for key price actions. For me, I would be keenly watching the retest to see if this starts the market crash as I expected.
In fact, my Master's Stock Options Picks subscribers and I took this opportunity to take profit on the put options positions that we put on last week in anticipation of this dive. Did you miss out on profiting the past one week? Or did you actually lose money? Join my Master's Stock Options Picks service now and profit with me!
Market Crash Timer: RED
For now, the market turns a short term bull trend within an intermediate bear trend and primary neutral trend.
(Yes, I only publicly post my report here every other day at best but paid subscribers get my reports DAILY for LIFE... sign up now! Only $99 for LIFE! And it takes only one winning trade to make that back and MORE, you know it!)
This was what I said in yesterday's report to paid subscribers...
"...was the formation of my all time favorite bullish reversal pattern being formed... the Dragon Tail Formation. This is basically a formation consisting of a sharp drop ending with a hammer candlestick that makes the whole formation look like some kind of tail. The Dragon Tail Formation basically signal a short term end to a bear trend and that a short term bull reversal / rebound / dead cat bounce / bull trap is going to start right following this formation."
And indeed it was so. The market turned around on the dragon tail formation once again exactly as it predicted. As I mentioned earlier this week, the second week of each month is typically a technical driven week as traders and investors make sense of the heavyweight economic reports of the first week. This rebound is a direct result of traders accumulating into a grossly oversold condition. In fact, the QQQ was down 7 consecutive days before the dragon tail formation, hows that for grossly oversold... the last time it did such a long stretch was the correction of 2012 and even that signalled the end of that correction. Now, don't get me wrong, this time is different because it happened within the framework of a potential market crash so it would not have the reversal effect it did the last time.
So, the dead cat bounce has started and myself, like so many other renowned analysts, is of the opinion that the market crash would officially begin only after this dead cat bounce has proven it to be a totally dead cat by failing at a critical resistance zone and that should happen within the next few days when the market retests the 20 or 30MA. Very nimble traders could actually use this dead cat bounce for some upside profit or be patient and use it to accumulate more put options at better prices. Of course, successful trading is not about predictions but understanding what condition the market is in at the prevailing moment and watching for key price actions. For me, I would be keenly watching the retest to see if this starts the market crash as I expected.
In fact, my Master's Stock Options Picks subscribers and I took this opportunity to take profit on the put options positions that we put on last week in anticipation of this dive. Did you miss out on profiting the past one week? Or did you actually lose money? Join my Master's Stock Options Picks service now and profit with me!
Market Crash Timer: RED
For now, the market turns a short term bull trend within an intermediate bear trend and primary neutral trend.
posted by Jason Ng at 5:57 PM
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