Stock Market Analysis

Tuesday, January 19, 2016

First Positive Week of 2016?

Welcome back from the long weekend!

Well, the dead cat bounce did not happen as I expected last week afterall. This is why I always stick to trading put options / bearish positions within such an intermediate bear trend as the possibilities of continuing downwards always outweighs the possibilities of moving upwards significantly even for only a short period of time. In fact, last Friday, the market did exactly what I predicted two weeks ago, taking out the August low. And as I said then, taking out the August low also means the confirmation of the start of the 2016 market crash, which could become a rather historic event with so many geopolitical and economic turbulence hitting all at once. The world is rarely messier.

Today, even though the market opened strongly, it didn't take long for the bears to take it all away. Indeed, traders and investors alike are selling into every bit of strength now. However, this is when it starts to get VERY tricky. The market is now in that very very strong support zone once again. The region where it bounced from the dead twice before. This time round, with the market this grossly oversold, with the buying strength coming in and the internals actually pointing more bullish than bearish with total equities put call ratio trading in favor of call options for the first time in a long time, I would say this is where a dead cat bounce could really happen. By dead cat bounce, I mean a short term rally that could be two to three days long, which means this could basically end up as the first positive week of 2016. Which means that unless you are an extremely experienced and nimble trader, attempting to profit from this "rally" is not for you. Use it to put on put options at a better price.

So far, this decline along with the hit in the energy sector due to the oil glut, my Master's Stock Options Picks subscribers and I have managed to take a pretty nice 35% profit on QEP put options last Friday. Are you missing out on profiting from this decline? Join us now before its too late! --> Master's Stock Options Picks!

Market Crash Timer: RED

For now, the market remains in short term and intermediate term bear trend within a primary neutral trend. (When will primary trend be turned bearish as well? I will explain this in my report to paid subscribers tomorrow)

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