Dead Cat Bounce – A Textbook Example

Posted by barkand on May 13, 2011 under Candlestick charts, Classic chart patterns, Commodities | Be the First to Comment

On the MTA website recently, there was a small discussion about the exact meaning of “dead cat bounce”. Today, courtesy of the silver market, we have a good visual example.

It is not strictly necessary,  but in this case prices did retrace back to the first Fibonacci level before falling to new lows. Also, the bounce here could be described as a case of a “falling three methods” continuation pattern in candlestick terms.