Tag: dead cat bounce

Short Copper, Pray For Gold, Watch Ratio

Posted on by Aibek Burabayev

Aibek Burabayev - INO.com Contributor - Metals


Dear INO.com Readers,

Today, I'm reviewing three metals based on short-term analysis.

Copper Is A Good Sell

Daily Copper Candlestick Chart

In my January post, I recommended selling copper above $2.75 and I hope you enjoyed a nice profit. For those of you who didn’t take that chance, below is my new one for you.

In December, copper entered a small steeper downtrend (highlighted in red) as the falling price accelerated. After breaking below the descending triangle’s base at $3.02 on the monthly charts, this red metal hit a multi-year low at $2.42, unseen from 2009, losing an impressive 20% in just 2 months. The price met the downside of the channel and quickly bounced off for a $0.20 gain and I will show why you should consider it a dead cat bounce. Continue reading "Short Copper, Pray For Gold, Watch Ratio" →

All Eyes On Crude Oil

Posted on by The INO.com Team

Has crude oil bottomed out? That's the question on investors minds today as this market has moved up close to 10% in just the past few days. I have been warning of a rally based on the positive divergences I saw on the daily charts and the fact that the end of January marked the seventh month in a row that crude oil had closed lower.

Whether this is a dead cat bounce or a reversal of major proportions in the oil patch sector remains to be seen. Certainly, the market is getting close to making some major technical reversal signals and should they kick in I will, of course, follow them. What often happens with prolonged market trends whether they are on the upside or downside they tend to lull traders and investors to sleep who are expecting to see more of the same.

In today's video, I'll be looking at crude oil (CL.H15.E) and sharing with you the exact point where crude will reverse its downward trend and start a new bull trend. Whether this will be a dead cat bounce, meaning just a short covering rally or a true reversal to the upside remains to be seen. I'll be examining both scenarios in today. Continue reading "All Eyes On Crude Oil" →

Will The Rally End?

Posted on by The INO.com Team

Will Friday's rally continue or was it just a "dead cat bounce"? There is no doubt about it, we have been seeing lots of volatility in the markets. Is it likely to continue? Like in the past, it will continue until it stops and the market settles down. Nobody can give you an exact timeline when that's going to happen, but it will happen. In the meantime, having a solid game plan, one that you know has been successful in the past, will lead you to successful trades.

You've heard me say this before, the market can only move three ways, it can go up, down and sideways, that's it! When you boil it down to those simple terms, it is easy to see how investors can create many of their own problems by over-thinking a situation. You may have been guilty of this yourself at some point in time, I know I have. It is so easy to get caught up with the hubris of the market and lose sight of your investment goals. It's also easy to fall into the trap of listening to too many talking heads. Oftentimes when this happens, it leads to confusion and will leave you in a state of paralysis. Continue reading "Will The Rally End?" →

Is This A Dead Cat Bounce?

Posted on by The INO.com Team

Hello traders everywhere! Adam Hewison here, President of INO.com and co-creator of MarketClub, with your video update for Friday, the 7th of February.

After getting pummeled the past several weeks, the markets recovered some this week and appear as though the indices are going to close out either flat or with modest gains. Many popular stocks are showing gains on average of about 3%, not a bad move given how much they were pushed down.

Gold and crude oil also moved in the same direction, each gaining on average a little less than 1% for the week. The mighty Dollar on the other hand did not fare so well this past week, losing close to 1% in heavy interbank trading. Continue reading "Is This A Dead Cat Bounce?" →

Never try and pick a bottom but look for the clues

Posted on by The INO.com Team

Never try and pick a bottom but look for the clues

The action yesterday on the NASDAQ was particularly interesting as market movement resulted in a "gravestone doji," which is a Japanese Candlestick formation that often signals a turnaround.

What a "gravestone doji" means is that the buyers and sellers are in an evenly matched tug-of-war and potentially signals the first clues that the NASDAQ may be putting in an interim low.

Take a look at the chart and see what you think. If the NASDAQ market closes higher than yesterday's high point, which is 1,806, then there's a good chance that we'll see this market at least have what some traders call a dead cat bounce.

It is not profitable to try to pick the top or in this case a bottom. What you want to look for are clues that maybe, just maybe, the market is beginning to put in a low.

Japanese Candlestick charts are a fascinating form of charting as they represent both a visual and psychology view of the market.  If you're not familiar with this form of charting, INO.com will be happy to send you a e-book that explains most if not all of the major candlestick charting patterns. You can reach us at 1-800-538-7424, or email se*****@in*.com to ask for the candlestick e-book.

I know the e-book will help your trading as it did mine.

Every success in trading,

Adam Hewison
President, INO.com
Co-creator of MarketClub