Dead Cat Bounce – Possible Crash Alert!
Today, the stock market should see the typical Tues. counter trend rally. This is likely to be the final dead cat bounce before a probable ten percent decline for the NASDAQ and most averages. The urgency and measures outlined by the FED tomorrow should determine whether it is a flash crash or something slower and more drawn out. Yesterday, I warned to keep an eye on my crash canary, TDG. Another factor to keep in mind about a possible crash. Many occur in the sixth week after a top. I know the S&P made a new ATH on Friday, but if you look at weekly charts of all the major averages, they basically topped six weeks ago and despite having made highs along the way, the trend has been down since. A rally from here could negate that trend, but don’t count on it. I have been calling for a decline and it is just a matter of how fast and how deep the market falls from here, after today?