Dead Cat Bounce Off a K Wave
The stock market isn’t all that’s happening in the world, not by a long shot… but it’s some of the news. Predicting it is a full time job for some. Fortunately, not for me. But I’m interested. And I have a tiny position in the market. A bear position, of course.
I was reading some material yesterday that really hit me. I’m not a technical… a person who believes that the patterns of the Dow Jones repeat in certain ways. They can, yes. But just because the Market moved in a certain way the last time a certain pattern occurred, I do not believe that it will necessarily act the same this time. Not necessarily.
But sometimes it does.
An erudite technical named Al Coryell made a chart of the market just before the Crash of 1929, and a chart of recent movements . You can almost overlay the pattern, point for point. If you want, you can see that here:
He does a more recent, more extensive analysis on this page:
http://www.thepanicnews.com/2010/02/08/is-that-a-dead-cat-bounce-ing-off-that-k-wave/
It seems that we have continued to move along that fault line.
The bit about the dead cat bounce is marketspeak for a short rebound after a sharp decline, which is exactly what has been happening in the market during the past year. The only point of disagreement between anyone is whether the rebound will continue, up, up, up the ziggurat… or falter a little bit… or complete the dead cat bounce, which ends in a sharp decline. Splat.
You can guess which one I think it is.
Al says we’ll know for sure when the market (currently at about 10,300) reaches 3,000.
On its way to 400.
