A Dead Cat Bounce?

Is the recent market bounce a dead cat bounce? After the SP500 being up for four consecutive days, it experienced a down day with a loss of 0.65%, or 8.38 points. The Nasdaq 100 and the Dow Jones Industrial incurred similar losses. Unless these market indices can hold above their recent pivot low, then this brief up trend could turn out to be a dead cat bounce.


SP500:




Nasdaq 100:




When a market leader such as AAPL starts to break down, it doesn’t instill confidence for the bulls to step up. If AAPL break down from the descending price channel and move below 310, a price below 300 could be very probable.





Until the market has shown sign of a reversal, such as a new higher high/higher low, I will either move to the sideline or look for short setups.