dead-cat-bounce

Stock Market Crash March 2016 update: Dead Cat Bounce

In February the S&P 500 lost 0.3%, the Dow Jones gained 0.4% and the Nasdaq fell by 1.1%. All 3 indices made some fresh new lows for the year based on daily closing prices. This decline was caused by declining oil prices, fears of a global economic slowdown and the interest rate increase by the FED. All of a sudden oil price declines don’t have a positive influence on the global economy anymore because so many countries and companies rely on high oil prices. Countries like Saudi Arabia and Russia are struggling under the current low prices. Surprisingly the U.S. as well because of the shale oil boom, which made the shale oil industry a significant part of the U.S. economy. Also banks are hit because of the loans they gave to the shale oil companies.

Last month’s prediction

Last month we predicted to be at the top of a dead cat bounce. Indeed the bounce stopped on the exact date of the publishment of the article. After that the S&P went down from 1930 to 1806 points. At the moment an even bigger dead cat bounce is taking place. Levels of around 2050 could be reached in the S&P 500 but no new high is expected by the From 1k to 1 Million team. This will be a new opportunity to short the markets for high prices. Markets can always do unexpected things with lousy fundamentals! Always keep in mind with trading: markets can stay irrational longer than you can stay solvent. We see this dead cat bounce as irrational.

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