Find and Adopt Dead Cat and Bow-wow Trading Patterns

If you're not a regular reader of The Kirk Report, you're missing market commentary from a trading veteran who's concise and straightforward about market activity - he's also got a fun streak of cynicism as it relates to the mainstream financial publications like Barrons et al. I got hooked on Kirk's site by the lists of links he regularly produces.

A couple of posts this week speak directly to real-time Trade-Ideas strategies and our free stock research. So I'm putting 1 and 1 together to make something that's at least 2 or greater than the sum of its parts.

Dead Cat Or Buying Opportunity?
Charles wrote on Wednesday this week:

The reaction to earnings this week has been disappointing and many traders will be watching the strength of this bounce to gauge whether we're just seeing just a dead cat-like oversold bounce. . . the last thing you want to see if you're long and strong is a strong morning followed by another round of selling on higher volume.

Previously we've modeled many strategies that look for oversold opportunities; however, we may be seeing overbought conditions. Take a look at the strategies we've described below and think of you can use them when "Flipped".

• Feel the Bottom? See the Signpost - Trade-Ideas is a great tool for building scenarios to predict what kind of present market conditions exist - the next best thing to predicting where it goes. "Flipped" scans from this post include: 20-Day Winners by %, Crossed above 200 day moving average
• Dead Cat Oversold Bounce Patterns in Trade-Ideas - These can also be described as Double Tops or Rectangle Tops

Bow-Wow Situations
Charles wrote on Thursday:

Speaking of dogs, two bow-wow situations of major proportions can be seen in both the financials and homebuilders. I guess all of that "subprime is non-sense" and "what housing bubble?" is starting to come home to roost. Perceptions in the market can change like the weather in Minnesota (often and without notice).

A Trade-Ideas custom scan (Note: this is free EOD data we make available for anyone) spots in quick fashion plenty of the stocks within these industries and in others. Here's two versions on the same theme:

• I call this one, "Stocks at All-Time Lows"
• You could also try, "Stock at Yearly Lows"

Have a great weekend