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Why 57% of These Bounces Fell Another 5%

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Breakdown

0:00NASDAQ 100· ticker

NASDAQ 100 — dead cat bounce, 13% drawdown

  • Dead cat bounce driving markets today
  • NASDAQ 100 rallying sharply
  • 13% drawdown over 22 days
  • First bounce is easy part
  • History suggests warning label
0:01NASDAQ 100· ticker

NASDAQ 100 — historical performance post drawdown

  • 47 comparable episodes since 1986
  • 1.47% gain next week
  • 0.37% gain next month
  • 1.7% gain next three months
  • 57% suffered 5% decline next month
0:02NASDAQ 100· ticker

NASDAQ 100 — median worst drawdown

  • Over 40% lost 10% next month
  • Median worst drawdown 3-month period 11.54%
  • Semiconductors bouncing after Thursday's liquidation
0:03treasury yields· ticker

Treasury yields — stronger hiring pushing yields higher

  • Stronger than expected hiring pushing yields higher
  • Pressure on growth stock valuations
0:04AI· ticker

AI spending — still under scrutiny

  • AI spending still under scrutiny
0:05lesson

Market caution — avoid chasing rally or naked puts

  • Avoid chasing rally or blindly selling naked puts
  • Look for improving breath, stabilizing credit, lower volatility
  • Sharp rebound can happen before final low

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