Faking A “Dead Cat Bounce?”

Are these last few days a prolonged corrective rally or have we bottomed out? I guess if he wakes up, sees his shadow and runs off we’re in for a longer rally.

faking-a-dead-cat

No, he’s not dead. That’s my office manager watching the phone. We named him Bugs because he bugs us all day.

faking-a-dead-cat-bounce-2-18-16

Anyway, we had a great system trade today in the$ES as reflected in the above chart. The self adaptive system picked out SubSystem #1 early in the day, got stopped out of the long trade but re-entered a few minutes later and hung on most of the day to get much of the gain in the $ES. Most of the subsystems were long at one time or another but #1 was the only one that maintained a long position and the algorithm was able to hang on to that signal without wavering until things got sloppy near the end of the day.
Regarding the dead cat bounce, my money’s on a slowly grinding upside recovery. Tomorrow will be sloppy following today’s big rally so the Friday/Monday action will more likely set the pace. We need to hold any declines to the 50% level between today’s close and the recent 1802 lows to keep any upside momentum. If that breaks, look out below…

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Dr. John Clayburg

Dr. John Clayburg Trading Systems Specialist

John Clayburg graduated from Iowa State University in 1971 with the degree Doctor of Veterinary Medicine. After the demise of his partnership in a large animal practice in his home town of Coon Rapids, Iowa – brought about by the ag crisis of the 1980’s – he and his wife Karen decided to raise their kids on the family farm rather than seek another practice.

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