{"id":3899,"date":"2024-05-04T00:05:42","date_gmt":"2024-05-04T00:05:42","guid":{"rendered":"https:\/\/businesstriumphs.com\/index.php\/2024\/05\/04\/is-this-a-dead-cat-bounce-or-a-bounce-with-legs\/"},"modified":"2024-05-04T00:05:42","modified_gmt":"2024-05-04T00:05:42","slug":"is-this-a-dead-cat-bounce-or-a-bounce-with-legs","status":"publish","type":"post","link":"https:\/\/businesstriumphs.com\/index.php\/2024\/05\/04\/is-this-a-dead-cat-bounce-or-a-bounce-with-legs\/","title":{"rendered":"Is this a Dead-Cat Bounce or a Bounce with Legs?"},"content":{"rendered":"<div>\n<p>Stocks fell sharply into late April and then rebounded over the last two weeks. SPY fell 5.34% from March 28th to April 19th and then rebounded with a 3.26% gain the last two weeks. Does this bounce have legs? Chartists can separate serious bounces from dead-cat bounces using breadth. Today\u2019s example will use the S&amp;P 500 and the percentage of S&amp;P 500 stocks their 20 day SMAs. \u00a0<\/p>\n<p>There are two steps. First, the indicator needs to become oversold (setup). Second, we need to see a significant increase (breakout) in upside participation (signal). An oversold reading signals a significant decline and provides the setup for a bounce. Aggressive traders can trade the oversold condition. A subsequent move above the breakout level signals adequate participation to sustain the advance. Now comes the subjective part. We must choose our oversold and breakout levels. I am choosing 10 and 70 percent for SPX %Above 20-day SMA. <\/p>\n<p>The green shading on the chart above shows when SPX %Above 20-day became oversold and the green arrow-lines mark the subsequent move above 70%. There were setup-signals in March-April and again in October-November. Both led to significant bounces. Notice the red shading where the indicator failed to clear 70% in mid October. This was a feeble bounce and SPY moved to a new low in late October. SPX %Above 20-day then surged above 70% in early November for a signal. \u00a0Recently, the indicator became oversold here in mid April for a setup and moved back above 50% this week. An oversold bounce is indeed underway, but I need to see a move above 70% to show a participation breakout. <\/p>\n<p>We are monitoring the rebound in the S&amp;P 500 and Nasdaq 100 at <a href=\"https:\/\/trendinvestorpro.com\/subscribe-chart-trader\/\" target=\"_blank\" rel=\"noopener\">TrendInvestorPro (ChartTrader)<\/a>. Our 10 indicator composite indicator became oversold in mid April, but we have yet to see the required breadth thrust to signal a strong increase in participation. ChartTrader reports and videos provide broad market timing signals and trading setups for leading stocks and ETFs. This week we featured setups in the T-Bond ETF (TLT), the Biotech SPDR (XBI) and four Tech ETFs (IGV, SOXX, CIBR, SKYY). <a href=\"https:\/\/trendinvestorpro.com\/subscribe-chart-trader\/\" target=\"_blank\" rel=\"noopener\">Click here for immediate access. <\/a><\/p>\n<p>\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Stocks fell sharply into late April and then rebounded over the last two weeks. SPY fell 5.34% from March 28th to April 19th and then rebounded with a 3.26% gain the last two weeks. Does this bounce have legs? Chartists can separate serious bounces from dead-cat bounces using breadth. Today\u2019s example will use the S&amp;P [&hellip;]<\/p>\n","protected":false},"author":0,"featured_media":3900,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-3899","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stock"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/3899","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=3899"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/3899\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/3900"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=3899"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=3899"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=3899"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}