Will this market hold up or did we just see a BIG dead cat bounce today?
Answers
4085 points
EthanR answered one year ago …
By definition, the dead cat bounce is a very modest bounce higher, and usually on weak volume, following a decline. Since today was the strongest day in 50 years, I don't think we can say it was a dead cat bounce, big or small.
It wouldn't surprise me to see some profit taking tomorrow, especially with the stocks that were up 20% or more today, but after that I believe we could go higher for a little while until we hit resistance.
678 points
BoxCar answered one year ago …
Its possible DJIA could continue downward to 8K where it was 2003 but
with the global banking system backing, large investors would step in to
acquire all the bargains that would exist by then, so DJIA should work its
way back up to 11K
3963 points
MNSL answered one year ago …
I think both EthanR and Boxcar are correct.
Markets have become erratic, and anxiety has overcome logic,
Markets have become more inefficient again
Factors to watch:
December gold futures close below $800/ounce –
The CBOE Volatility Index (VIX) closes below 40 and preferably below 35
It is time to invest in next rotating sectors while avoiding bubble sectors.
307 points
CG answered one year ago …
I'm generally in agreement with the above, as detailed today here - http://ridingthegravytrain.blogspot.com/2008/10/selling-pwe-26-in-one-day- on-stock.html
We're looking for shorting opportunities rather than particiapting in delusions of having seen a bottom of of "value" based on trailing cash flow and earnings in a past economy that's very different from the one ahead.
474 points
spider348 answered one year ago …
I agree, not a dead cat but the light volume that accompanied the bounce
makes me suspicious. The trip south was on huge volume, was it capitulation ? Don't know yet. Most of the 100 stocks on my screen during the 'bounce'
could barely move - flat. Today, like EthanR said, was some profit taking but
I think this needs to settle a bit before we know anything.
