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Dead-cat-bounce

SP500 futures ( $SPX $SP500 1D) sell in May ? I been following the bounce peacefully these past weeks. But now something is up. A head and shoulders pattern form on the 4h and It is on the verge of completion. If true it may be the beginning of a correction. Target (2636) Stop loss if the price goes back above the right shoulder (2942). We can see impulsive waves on the way down meaning that the primary move is downward. Quite the simple trade. As time goes by, I will keep you updated on the evolution of the asset price, so make sure to follow me on Tradingview If you have any questions or requests, fell free to ask. @Djio_ Disclaimer : This is not financial advice as I am not a financial adviser. This is just my knowledge on what can be said and done from the chart. Due to the volatile nature of the market, everything can change on a day to day basis. Everyone is wise to manage their risk properly when considering any trading decision or activities. PS: I cannot emphasize enough the risk associated with the activity of trading due to the imaginary nature of all paper contracts, the reason why I prefer mainly trading cryptocurrencies instead of more “traditional” assets. On the other end without total systemic collapse it can quickly become a good trade opportunity.
OANDA:SPX500USDShort
by DecisionDoji
SPX500 - Will this be the top of the Dead Cat Bounce?Looking at the SPX500 Futures: 1. Looks like we could be at the top of a Dead Cat Bounce 2. If this is not the top, a potential tap off the 200 EMA would be where I would expect it to dump Fundamentally due to covid and the world being under house arrest, I would not expect markets to continue to rally and I am bearish as you can be on a Macro Level. Technically this is presenting a great short opportunity on open. I will go in with 50% of my position around where we are when we open, the other 50% I will add at the 200EMA and set a stop above it with room for a wick just in case. Trade, Chart, Learn, Repeat Coach K
OANDA:SPX500USDShort
by Joel_CoachK
15
Inverted Dead Cat BounceAnalysis on BTCUSD with the pattern Inverted Dead Cat Bounce, that happens after a Dead Cat Bounce. Price rises more than 15% in one day after a downtrend, showing a 4 weeks possible scenario. At the end of this period, there would have some opportunities to buy again. Sell on the 1-2 day of the event. A White Spinning Top candle pattern appeared at the start of the second week of the event, with high wicks on top and bottom of the candle, showing indecision.
COINBASE:BTCUSD
by ThiagoSchmitz
2
S&P Dead Cat Bounce?So I have shorted the S&P on the 4 hour due to this pattern: Very nice break, and as you can see on the 4 hour we have YET to make a lower high swing in this downtrend move. Trends are composed of multiple swings. I do like what I see on the daily chart. When an instrument has moved down close to 3% in a day, it is likely over extended. I can see a bounce here before a move down lower forming our first lower high swing on the daily chart and also a head and shoulder pattern. So a dead cat bounce perhaps on the cards here. But to me, it is just plain old market structure.
OANDA:SPX500USD
by Uncharted-FX
4
BITCOIN TARGET HIT - WHAT'S NEXT?What a week we had in crypto market!!! Our target of $6650 was met precisely! I mentioned that we should expect $500-$1000 candle, and we had 500$ move couple days after.. :) I expect consolidation of some sort to be seen before bullish rally.. Orange box is consolidation zone 0 if we close above on daily - longs can be opened with best R/R ration depending on your trading management. Next target is $7750-$7850 region with possible spikes to ~$8000.. Only closing daily above $8500 would switch my bias and it can turn out to be strong bull rally - until then, I'm sticking to the green regions as my TPS Keep in mind that we have important zones to cover lower than our recent low - that's why I think it will be just a "dead-cat-bounce" before continuation lower.. A lot of choppy price action to be expected too! *Don't forget to take profits if you see market turning around at crucial zones. This is not a financial advise. Have a good one!
BITSTAMP:BTCUSDLong
by Patrikas10
2
Dead Cat Bounce - A Spooky PatternIntroduction Its halloween ! And i felt like making a post about spooky stuff related to trading. I wanted to discuss about what is a zombie economy but i clearly don't have the time nor the experience to do that. So instead i'll talk about the dead cat bounce, a pattern commonly found in downtrending (bearish) markets, this pattern is also known as "Bear market rally". We'll describe the pattern, its causes, its upsides and downsides. Unfortunately my knowledge on price patterns is relatively low, if you feel the need to correct me leave a comment. Brace Yourself The Dead Cat Is Coming ! A dead cat bounce is a pattern appearing during downtrends, this pattern is associated to a brief upper movement (recovery) followed by a continuation of the downtrend, therefore the pattern can be classified as a retracement. Terminology The term "dead cat bounce" comes from the saying that "Even a dead cat will bounce if it falls from a great height", physics won't necessarily agree with that but the phrase can be deconstructed in order to explain the pattern described : "Even a dead cat will bounce if it falls from a great height " - Dead : Refer to the downtrend. - Bounce : Describe the motion of the pattern. - Great Height : Emphasis on the prior downtrending movement magnitude. Causes Of A Dead Cat Bounce Causes of certain motions in prices fluctuations are hard to describe, the structures (trends, cycles/seasonality...)/patterns in price can be either : stochastic (the pattern is formed because of a realizations of random fluctuations) or deterministic (the pattern is formed because of certain external causes). A deterministic cause of a dead cat bounce is described by Kolja Johannsen as investors taking excessive risk and unprofitable positions in order to recover an initial loss in a declining market, the accumulations of those investors as well as investors believing in a reversal participate in the creation of this upward movement. Upsides Of Dead Cat Bounces When a security allow short positions, dead cat bounces allow late investors to go with the downtrend from a more interesting point. In stock markets they can allow investors to potentially profit from the bounce, however such strategy require extremely precise timing, one must make sure to sell at the maximum of the retracement. Such methodology make the investor exposed to the continuity of the downtrend, thus making the risk reward extremely uninteresting. Downsides Of Dead Cat Bounces A dead cat bounce like any retracement is a parasitic motion in the main trend, they might make investors believe in a reversal, in a mathematical standpoint those parasitic motions affect technical indicators, this is where robustness is required, robust indicators might be able to ignore the dead cat bounce. The dead cat bounce deform the main trend and therefore can add complexity to a trend model. Above a simple linear trend, we can describe it as a simple line + white noise, such equations are called equations of motions. However describing a dead cat bounce mathematically might require additional complexity. Detecting/Avoiding Dead Cat Bounces Classifying upward movements as either a retracement or reversal is no easy task, however we can still make use of several tools in order to detect or avoid dead cat bounces. The first tool being filters, filtering a dead cat bounce can be made using a low pass filters (filter noise/cyclic components) or notch filters (filter cyclic components). The filter setting must be adjusted in order to be able to filter the pattern. Blackman filter of period 100 Rolling max/min with period 100 (Donchian channels), no highest low have been detected here, witch allow us to remain with the main trend, note that rolling max/min are also low pass filter. Another approach might be made using support and resistances, we can see that both the minimum/maximum of the dead cat bounce are both pullbacks, altho this observation is clearly insignificant and lack logic (like most technical analysis approach) unlike the previously discussed method. Conclusions Altho my experience on patterns is low, i hope i could teach you something new in this post. Dead cat bounces make parts of those disruptive patterns that might make us take a bad position, we have also seen that they can be made from the emotional bias from investors, that is premature re-entering of a declining market, which is never a good idea. Finally we discussed methods to filter/detect such pattern. Like most patterns in technical analysis their detection/interpretation is relatively subjective to the user, the uniformity/complexity of stock market prices make detection of patterns quite complex. But the most important thing to take from this post is that strategies robust to retracements can help the investor make better decisions, going long because of a dead cat bounce is not a enjoyable experience, that cat wasn't so alive in the end...Happy Halloween !
Education
by alexgrover
8
Is the eventual dead cat bounce finally coming soon?Ever since bitcoin topped it's been in this big broadening falling wedge that has had one fake troll-breakout after the other.. this pattern is now huge and the bounce that it calls for is just getting bigger and bigger with it.. I don't think it's safe to long at this point at all, but I am starting to suspect the real breakout might actually be close this time, seeing how we touched that very important 9.8k level yesterday.. I will not open a margin long at this point but i did take a chance and bought just a little bit more bitcoin at about 10.1k as a long term investment. What do you think is going to happen? Share your thoughts in the comments!
BITSTAMP:BTCUSD
by jambalulu
1
Bigger dead cat bounce incoming?We seem to be confirming another downtrending resistance line that suggests that we are yet again in an even bigger falling broadening wedge , but the pattern that we are currently in within that wedge is a bearish rising broadening wedge , so if i had to guess I would assume this big line of resistance will be broken pretty soon, the price will move up within that secondary smaller wedge , and then we will continue the correction to the downside. What do you think? Will I get it right? Share your thoughts in the comments below.
BITSTAMP:BTCUSD
by jambalulu
1
SPY SHORT : Don't be fouled!Long for today, short for the week. Don't be fouled by the news. It is a bounce of the dead cat We say: Buy the news, sell the rumours, but the invert is as valid. Buy the rumours, sell the news. Today is a good opportunity to cut a bit... 1/4, 1/2... You know how you'll be comfortable. Just a reminder: Even if a real deal is done and the interest is reduced, it's already in the rally. This market needs a pullback. That is why, I am long for today, short as soon as it weak. Be prudent! That's all. Maybe reducing exposure. An alternative could be GOLD, BOUND, Bank stocks, Bio stocks are all good alternative. I wish you all the best! Have a good trading time! Waz
AMEX:SPYShort
by Wazaby
Bear trap before a dead cat bounce?Good day Traders Bitcoin has been battling with our DMA50 resistance, is now printing hidden bearish divergence on the daily, and we have potential for bearish DI cross looming. The recent short squeeze managed a 38.2 fib retracement after our drop from our 24 December swing high, so I have a 168.1 fib extension target of $2780 if we fail to get above DMA50. Although we had a strong volume candle on the squeeze, we lacked any volume follow-through for a continuation of a rally, and once we reached DMA50, our buying volume dropped off, unlike the build up of buying volume when we bounced from our December lows. A healthy rally would entail us taking the stairs up and elevator down but this was an elevator straight to our DMA50 resistance. We could potentially have a drop / bear trap from here, breaking below WMA200 to set new lows, invalidating the triangle from my previous chart and forming support of a large falling wedge, triggering stops just below $3k. Bitcoin should then have a dead cat bounce, first back above WMA200, then to wedge resistance, and then a breakout with a $4200-$4400 resistance target sometime towards the end of March / start of April. When btc reaches $4200, I suspect we'll encounter strong horizontal resistance as we have since we dropped below $4500 in November last year and we should meet our DMA100. Depending on the strength of trend and bottom-calling fomo, we should have a 38.2 fib retracement back to our 61.8 fib support, somewhere around $3670, which will give us 168.1 fib bull trap extension target of $5110 (to DMA200) once we break above that $4240 - $4480 and DMA100 resistance. If we have a deeper 50 fib retracement to $3500, I'll revise my bull trap target to $4770, which would be a 138.2 fib extension target. We should then potentially drop back to our $3k support, extending the bear market, with a move to new sub $2500 lows. Have a look at the NVT indicator which gives us a network value to transactions ratio and has been quite accurate so far on the daily chart for predicting the bottom/top. You'll see that we're in a great buy area on the weekly chart (flashes green for buy red for sell), but we still haven't bottomed yet on the daily chart, and you'll see that there was only 1 day where it flashed green in 2015 and that was during capitulation. Previous chart and potential to new lows from here: Scenario where we've already bottomed: Another bearish scenario:
COINBASE:BTCUSD
by Corn_Reaper
3
Short US Equities. The Dead Cat Bounce is Over.The market entered an important zone of resistance, formed by important support levels in the past. It is also failing to break through the 180 MA, where it has been rejected many times during this recent downtrend. We have also formed a double top, with bearish divergence shown on the RSI. As soon as we break resistance at 6530 with force, it will be a good short opportunity. I believe this was the completion of the dead cat bounce in the recent days, and we should now see a continuation of the downtrend. I will be playing this through SQQQ .
CME_MINI:NQ1!Short
by HBtrader22
Bitcoin : Christmas Dead Cat Bounce over ? What's next ? Hello traders. Going to open a short position around this 4170 area at the next 4hr red candle for several reasons : - We are around a 0.786 Fib Retracement from the previous 4.4k top and 3.1 bottom which is a key level for reversal. - We are making a nasty bearish divergence on RSI, MACD and Stoch, they have proven their worth during this bear market. - It looks like we might be forming a falling wedge, which is a bearish pattern. - There is always a story of power in a trend which is most of the time defined by volume. As you can see, the volume on this last pump is really not significant compared to the overall volume of the move. It was a push that was showing that the current trend might be weakening, so we want to participate in the pullback. Looking to find 3541 as first target being the 0.618 Fib retracement of this upward move. Risk Reward ratio is 3, pretty safe. What's next for BTC ? From my experience, bottoms, real bottoms, never flatten out and then spring like the action we have seen this past week. Actual bottoms are violent formation with huge wicks in the candles, enormous % variation and very brutal action. I don't define the 3.1 low as bottom, therefore I think we will see lower levels in the beginning of Q1 or later this year. I don't want to hurt feelings of the newly found bulls on this platform but I think this is only a dead cat bounce that has had a violent spring fueled by FOMO and broken dreams. Now if this is a spring, we need to see if this was the end of the action or if there is more. Basically, the intensity and volume of the coming pullback should give us clues to whats next. If BTC manages to stand it's ground at the 0.618 Fib and look for higher prices, we might be able to make a medium term higher high before going to find the real bottom. If BTC fails to hold the 2 levels that are on the chart, things will probably turn pretty ugly. Stay Open-Minded and Trade Safe. Wishing you all a Merry Christmas and beautiful end of the year celebrations ! CR.
BITMEX:BTCUSD.PShort
by Its_Gui
16