Waaayyyy back in October 1987 – when most of us younger brokers were licking our wounds from the DOW crashing 22% in ONE DAY – many of us were expecting the markets to rebound and hoping we still had job.
Unfortunately, for many of my associates, things didn’t work out so well.
However, those of us who survived learned and became familiar with the phrase “Dead Cat Bounce.”
A veteran floor trader coined the phrase by comparing dangerous and volatile markets with a cat.
His words of caution – the short version – were: “If you throw a cat off of a high-rise building, when it hits the ground it will bounce…but it’s still dead.”
Sorry to all you cat lovers out there.
I never forgot the imagery.
It’s also why yesterday’s rebound in markets make me question whether or not we’re looking at another dead cat bounce.
Stay with me, here.
So far in 2020, The Year of Chaos, we’ve seen some of the craziest action I can ever remember…and that doesn’t include the political CoronaHoax combined with the shut down of the global economy.
Last week the markets were getting beat up, especially in the tech sector.
Friday’s close in the DOW was at 28,130. By the end of Tuesday, it fell 629 points (2.2%) to 25,501.
Wednesday, it shot up to 28,180 but ended up losing 240 points in the last 20 minutes of trading to finish at 27,940…up 439.58 (1.6%) for the day.
People tend to panic when they hear how the market fell 600 or 700 points in one day. However, the percentages (approximately 2%) are relatively small.
Put this in perspective with October 1987.
If we have a one-day crash of 22%, then the DOW would fall over 6,200 points in one day.
Hopefully that won’t happen.
However, recent market swings are showing signs of “running out of gas” so I wouldn’t rule out a possible Dead Cat Bounce.
Add in the ongoing globalist’s agenda – stop at nothing while trying to destroy the global markets in order to get Trump out – and you have the makings of a very interesting fourth quarter.
How are you preparing for this?
Are you Connecting the Dots, yet?
Read our September’s edition of “…In Plain English” and learn how to position yourself for some of the greatest opportunities of your lifetime.
It’s Not Just About Finance.
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