The panic is over and everybody is expecting a market bounce.
Wonderful!
I’d love to see a bounce and have exactly one bounce position that’s in play.
However, that’s all I am doing right now.
Why you ask, if the bounce is highly likely?
It’s because we do not know how strong the bounce will be, or what it will lead to.
There are two types of bounces.
One that resumes the initial trend, and the other that continues the down move. The latter is often called the “dead cat bounce”. We’ll call the former “trend continuation”.
For now I remain patient and will wait for clues in price action and market breadth to get aggressive either to the long or short side.
In today’s video I go over exactly what you should be looking for to identify trend continuation or a dead cat bounce.
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