Here’s an interesting trading observation from Jeff Cooper’s Daily Market Report. He descirbes the potential for a “Trojan Horse” rally to occur.
If the market buys time here and traces out a longer rally than we have seen—-something more than 2 to 3 days—-perception will sharpen that another bullish correction has played out, one that echoes the correction process from six months prior.
“Perhaps, but it is worth considering the same perception crystallized a week before the 1987 Crash following a seven to 10 day rally. The masses, at the time, were convinced it was a bullish correction that mirrored a similar correction process roughly six months prior.”