Stock Market Analysis

Thursday, January 21, 2016

Dead Cat Bouncing?

Market closed positive day exactly as I have expected it in my report to paid subscribers yesterday following one of the most significant Dragon Tail Formations that I have seen since October of 2014. I explained what this formation is about and what it comprises of in my report to paid subscribers yesterday so I shall not go into it again.

Just like October 2014, this dragon tail formation is expected to turn the market around significantly and today confirmed that tendency and I have also prepositioned my Masters Stock Options Picks subscribers for this move. Even though this is the nicest dragon tail formation I have seen in quite a while, I  do not think that this time round it would have the trend reversal effect of October 2014. In fact, I think this will start that dead cat bounce I have been talking about all week long and being a dead cat bounce, if you are not already prepositioned for it like my subscribers and I are, then it would probably be already to late to catch on it for any significant reward vs the risk that you are taking because when the dead cat bounce is done, the market will turn around so hard that you may not have time to react to it and exit your call options or long positions profitably. In fact, major index futures are already pointing upwards post market (even though it really means very little to how the market eventually ends up tomorrow). The catalyst may be a better than expected leading indicators which is expecting a very bad number.

So far, the market is playing out a typical market crash prelude, no doubt about it at all. I hope nobody out there is still expecting the market to turn around back into a bull trend... even though that could happen, it is going to take a while... a long long while as this perfect storm recession comprising of almost every factors which individually has caused previous recessions could take a while to blow through...

Market Crash Timer: RED

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


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