So... is this rally legit... or a bull trap?

[GotherL]

I was Right . Glad I bought uvxy sqqq, will sell premkt if gaps drop

Grats. My 1st instinct was to hold shorts but got shaken out.

 

[ElCubano]

In other words, shorting rallies is like buying dips--it works until it doesn't. And no one has the magic secret de-coder ring to know when a long-term bottom is reached. The main difference between shorting rallies and buying dips is that bear markets are much shorter than bull markets. They can last up to 2 or 3 years (or longer if we have another Great Depression scenario), but often they're over in 6-12 months. The COVID crash and recovery was the fastest I've seen. All-time high, 30%+ crash, then back to new highs in like 4 or 5 months. Unfortunately, that led some newbies (including young option selling "experts" on Youtube) to believe that all bear markets end in a few months.

This one is going on almost 10-11months or so from top. Unlike the other bear scenarios I’ve witnessed, this one is a slower bleed and the FED can’t really do much more or less. All the bear bottoms I’ve witnessed have been violent in nature. Down 5-10% one day then up 10% the next …again more or less… this one nada

 

[murray t turtle]

Grats. My 1st instinct was to hold shorts but got shaken out.

%%
ACTUALLY with the longs up so much[bear rally] this week\ good place to cover shorts or exit some inverse ETFs.
Remains to be seen \if OCT lives its Stock Traders Almanac nickname ''bear killer''
Long term SPY,QQQ trend is still down, medium trend 50dma = down; but UPRO as of 11 am CST WED = Up13 %+ not in UPRO this week.
QQQ is a nice bear rally for week.................

 

[Nine_Ender]

Grats. My 1st instinct was to hold shorts but got shaken out.

In all seriousness Ken's posted choices of what to trade this week have been poor and he'd be better off silent then talking about how "right" he was about anything. The US$ was down this week creating a significant commodity move especially Oil producers ( given OPEC+ production cut that was anticipated and delivered ). Anything long energy was a strong trade all week. Anything long miners was extremely good on Monday and tradable since. Far more tradable then UVXY. This is a very strange week for Ken to be thinking he called anything.

 

[GotherL]

SPY just bounced hard off the 371 support and broke yesterday's high.

I am thinking shorts are getting murdered this week.

 

[Overnight]

SPY just bounced hard off the 371 support and broke yesterday's high.

I am thinking shorts are getting murdered this week.

If the NFP Friday comes in hot, bulls are going to get eaten, AGAIN.

 

[nrstrader]

Seems like a straight forward bear market rally to me. I am going to start peeling out once the VIX hits 25.

I think we will drift up on dip buying until the next wave of volatility. I don't really think in terms of "bull trap" though as that negative language would make me not want to be long here.

 

[murray t turtle]

SPY just bounced hard off the 371 support and broke yesterday's high.

I am thinking shorts are getting murdered this week.

%%
IT's possible;
only if they never cut a loss or have no longs

 

[vincentnyc]

I have moved from swing trading to arbitrage trading since the beginning of this year when I saw we were going into a bear market. Who know how long it will continue?

 

[Radiohead]

What do you guys think of this inverted hammer candlestick on the Weekly SPY chart? The only other time it occurred during this bear market was the first week of May and the market continued lower but one occurrence isn't statistically valid. Is the one in the picture viewed as a true Inverted Hammer even with the low of the candle being higher than the previous candle low? I've been holding off on short swing trades for the past 2 weeks because I couldn't get a clear read and still feel the same way. (I don't normally trade off the weekly chart, normally use daily for swing trades, but sometimes look at the weekly for more context.)