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[OTHERS] Up or Down ????

Myco, BuddingInvestor, AA & others...
A question for you guys....
Yesterday, a friend of mine asked me a damn bloody intriguing question. He asked me whether in my opinion the market looks like a Dead-Cat-Bounce chart ? Fcuk... what the heck was he talking about ? OK.. I know a little bit of charts, but not that in-depth level... so like a consultant, I told, I don't have the chart with me but I will get back to him later today. Meanwhile, as any internet dummy.. I "googled" it...
The search results was a learning process for me too....

Dead Cat Bounce Definition & Chart Example
tradingsim.com/blog/dead-cat-bounce

The Dead Cat Bounce: A Bear In Bull's Clothing?
www.investopedia.com/articles/00/101700.asp

Bulkowski's Dead-Cat Bounce
thepatternsite.com/dcb.html

There was a couple of charts example in it and when I compared it to tradeSignum TA chart on the KLCI... well... it sure looks like one to me !!

Ok...my question to you guys there,
1. So... is it a Dead-Cat Bounce ?
2. The Bulkowski's Dead-Cat Bounce have a couple of % trend reference, does the numbers correspond viz-a-viz Bursa/KLCI chart ?
3. With EPF, PNB, etc end-of day window-dressing, can we still identify it as a Dead-Cat Bounce ?

cheers guys.. & thanks inadvance for your views...


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Nice Job Ramsyll,

Although the chart looks like dead cat bounce in few instances, it is not.

The volume does not support it and the patterns dont really match.

But again it does look like it, lol.

Cheers
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Ok, from my opinion and understanding of what makes up a dead cat bounce..

Its basically a layman term for "technical rebound" , Because it was commonly used back in the old days where Technical Analysis is very much in the infant stage, so it actually describes a similar situation as a tech rebound.

As any tech rebound, there is no fix rules on how much it can rebound , it all depends entirely on the market at that time due to supply and demand and the mood of the traders.

So, Dead Cat Bounce is commonly found at the end of a long term uptrend, when there is sudden selloff which the index drops drastically until it reaches a very strong support where short term traders jumps in and attempt to profit from the rebound.(the bounce) , because it is basically a short term rebound which is unable to break the impending downtrend, it is why they label it as a dead cat bounce (just like how a cat falls down 20 storey to the ground and bounce off the ground abt 1 feet before falling to the ground dead).

well, thats what i think it is.. anyone has a better explanation for it? im all ears.

cheers & happy trading :)
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AA analysed it well, however I believe it's applicable only for stocks on a long-term downtrend, rather than uptrend - else I'd call that "Live Dog Dive" :D I.e. the counter has been falling for some time, till it reaches a level where traders deem it worthy of having a go, upon which it spikes back up. Unfortunately, being a dead cat (poor market conditions, fundamentals etc)the rally is unsustainable and so it gradually falls back down. May even form a heads-and-shoulder form depending on how long the 'bounce' is sustained.

Anyway, right now I'm also quite wary about the market, the budget will be announced later in the day (should be some good news for some). At the same time, a key employment report will be announced in the States which is likely to affect the mood over there. And as long as the European crisis remains unresolved, uncertainties abound.

Time for gold, perhaps?
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Agree with AA on the dead cat bounce. Agree also with BI on the European crisis. Till that, speculators will make most money from the flat market volatility. Late Friday - Teusday down, Wed - early Friday up between 1350 and 1400.
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