Dead Cat Bounce

Hello MarketClub members everywhere. I am sticking out my neck today and calling today's overnight rally a "dead cat bounce." This type of rally is not a reversal, it is more of a correction for a very oversold condition in the equity markets.

If we have any cat lovers out there my apologies go to you, but I have to admit I do love the expression "dead cat bounce." I'm not sure where the expression came from, but it seems to fit the markets perfectly.

MarketClub's Mid-day Market Report

Indices & Stocks: Make no mistake about it, the dramatic Brexit slide in the markets worldwide has had a profound effect both technically and psychologically on the markets. The major indices and many stocks appear to have put in tops that are capable of moving to some of the Fibonacci levels I outlined in yesterday's video.

Gold (FOREX:XAUUSDO): The gold market which has been on a tear in 2016 is having a bit of a pullback this morning. I think that the $1300 level should act as great support for this market. I would use that level in conjunction with the Trade Triangles and the 50% RSI line as an area to be a buyer if you're not already long gold. Gold still has a long way to go on the upside in my opinion.

Crude Oil (NYMEX:CL.Q16.E): The crude oil market has been on the defensive in the intermediate-term. However, the longer-term pattern for crude remains positive. In today's video, I will show you a very important single technical element that began in January 2016 and remains in place today for this market.

Brexit: While England and the rest of the world are still trying to figure out the effects of England leaving the EU it has sparked a fairly lively debate on our blog that you may enjoy participating in or reading. The ramifications of England's move out of the EU cannot fully be understood in the short-term. I expect that in the weeks and months ahead after some of the dust has settled we will see more clarification on this historic move.

When the world is going crazy and you can stay calm and rational you can make a fortune. The key here is not to get caught up in the hysteria of the moment, but to remain calm, cool and collected. One of the easiest ways to do that, in my opinion, is just look at the Trade Triangles, which are totally cold and calculated and don't give a hoot about the EU, the Middle East or China. The only thing that they do and do well is tell you which way the markets are heading.

Stay focused and disciplined.

Every success with MarketClub,
Adam Hewison
Co-Creator, MarketClub

11 thoughts on “Dead Cat Bounce

  1. I agreed with the bounce and LOVE your analysis and comments, but no video/analysis since comment

  2. I agreed, present jump seems and can be believed as a "Dead Cat Bounce"

    As an effect of "Brexit" Whatever happened, was just a process of "Fulfilling Demand of Chart" and that is always pre-determined so in absence of Brexit, Markets may have found some other reason for said volatality, so most probably, All Further Trend Confirmation will be taken place only after 1st weak of July, so till that, it will be batter to keep "Wait and Watch" for more precised and reliable directional signal.

  3. Doubtful...........all time highs are next.... My guess were are going full retard.. S&P 2500 by the time obama leaves office. There is zero volume on most days... the market is dead and will be easy to levitate to all time highs. Easy money. Bad news is now great news and even wore news is even better news.

    1. Oh and to further add to my comments above... .... capital markets love terrorists attacks.... markets will soar of the news out of turkey... it's sick but pretty much every terrorist attack the last couple years has seen the world markets just ramp higher.... love it.. dip dip by that dip.

  4. Brexit doesn't even have a plan to execute on seperation let alone a divorce...... watch this space.... we may instead see EU-UK renew wedding vow via a second referendum in Sept !!

  5. Adam,

    I was seriously about to join this blog based on some good guidance you have put out on Gold, AAPL, and energy but find myself wondering if you are 1 of those permabears. You break all your own triangle rules when it comes to SPX, DIA, and the QQQs which are about the best equity investments in the world. Wondering if you are blinded by youy hate of Yellen or central bankers...How about an explanation?

  6. Or perhaps in retrospect, a few months down the road, the Brexit vote will have all the significance of Y2K, which is my personal prediction as well as hope.

    1. hi everyone,

      i personally voted to leave the you euro because felt here in the uk we were better off outside the eu and i still stand by that choice.

      Not a major surprise that many of us felt the same way.

      Its gonna be interesting to see how low the pound will drop but its more important to stay together as brits

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