Fantastic Friday: Dead-cat bounce?

> Dow Jones

10,193.29 +125.38 +1.25%

> NASDAQ

2,229.04 +25.03 +1.14%

> S&P 500

1,087.69 +16.10 +1.50%

I don't know if this bounce will last an hour more, or a day, a week, a month ... but I am skeptical. The market teetered after an initial short squeeze (and massive buy-in), then returned to positive territory before the close on another possible squeeze going into the weekend.

I like cats. I even love a couple of them. I don't like them being dead. But this may have been a bounce, all righty. I am, whether I can really admit it or not, far from bullish. That lack of balanced thinking makes me a poor trader, or at least one who has disarmed himself.

So, I am pushing myself to think broadly, much more broadly. Normally optimistic and skeptical, I found it fairly easy to start trading inverse ETFs/ETNs. But when it came to trading an inverse and going long simultaneously, I lost. I forfeited. I didn't show up to the game, the meeting.

So back to some previous habits, like reading the candlestick analysis by American Bulls. Frankly, candlestick charting is great in doses, not a one-stop-shop to serve all needs. On Wednesday and Thursday, I didn't even look at the site. Technical analysis meant nothing. But if the market is back on Normal Street, even for just a few days, I have to think normally again.

Where AB is great help during a normal* market, it was of little help regarding certain vehicles like VXX. But with AAPL back on track, here's what American Bulls posted today after the closing bell:

AAPL — Buy-If. Today's Candlestick Patterns: Long White Candlestick, Bullish Engulfing.

If you've read anything about candlesticks, a bullish engulfing pattern doesn't fail often. If, as expected, Monday opens with a nice gap up and the market rally continues, I'm back on the Apple cart, train, tiger, leopard, puma ... probably in premarket if the price is right.

Here's AB's view of the S&P 500, or rather, SPY:

SPY — Buy-If. Today's Candlestick Patterns: Long White Candlestick, Bullish Piercing Line

In other words, a truly technical trader relying heavily on candlestick reads probably didn't enter these two stocks today and is waiting for confirmation on Monday. But what if stuff hits the fan over the weekend? What if Tim Geitner's trip to China isn't so good? What if the EU and US don't formalize a global currency plan (which I believe most traders expect by Sunday)?

What if, what if ... I wish I had been aware and nimbled at the opening bell, at least enough to re-open a position in AAPL at 131 or 132. For now, I'll wait and see how well the market holds up, even with nearly $9 billion withdrawn in the past two weeks. Is there enough liquidity? Are there enough bulls? Today, there were two short squeezes. Are there any left? I doubt it.

That's why I don't mind being 100% cash going into Monday. At some point, things could break down again. I'll be prepared by then.

More analysis from AB:

• BIDU (70.85 +3.27 +4.84%), buy confirmed today at 67.58. The site is free unless you subscribe, so outsiders don't know precisely when American Bulls steps into BIDU with a buy. But AB was prepared to enter BIDU today and was not going to enter AAPL yet. Strictly technical charting.

• C (3.75 +0.12 +3.31%) is another confirmed buy today (at 3.63). Today's low was 3.53 and it topped out at 3.81. Quite a range!

• DNDN (41.70 +0.79 +1.93%) has been beaten down severely. When the market was bearish, DNDN went down. When the market was bullish, DNDN went down. That period above 50 was short-lived. But here, AB has a "buy-if" stance pending Monday's opening movement.

• FXE (125.36 +0.61 +0.49%), or the Euro currency ETF, is already a "Sell-If" on AB after three up days. Today's white spinning top has formed a Bearish Deliberation Pattern. I wonder what the original Japanese translation of this pattern reads and sounds like. Well, maybe the Euro is due for a breather. Does this mean the short-Euro ETF, EUO (23.81 -0.20 -0.83%) is ready to bounce? AB says "Wait".

• F (11.26 +0.46 +4.26) was a Buy Confirmed today by AB. How cheap is that? Ford was 10.80 yesterday! I traded F between 11 and 13, so this is quite tasty.

• FAS (24.45 +2.26 +10.18%) roared today as financials bounced. I missed this, partly because of my doubts about banks on both sides of the Atlantic. There's no new infusion of cash coming from D.C. Regulation is being hammered down on the finnies. Taxes are going up for money-makers. For now, though, FAS is king of the day.

• FAZ (15.17 -1.77 -10.44%) made me nice money this week, and though AB classifies FAZ as a Sell-If, AB has been awful at timing FAZ. (AB is far, far better at timing FAS.) Because an inverse ETF like FAZ is so news-driven — candlestick charts won't be watching Greek riots or congressional bankster hearings any time soon — I look at the AB page on FAZ more for entertainment value than anything.

• FXI (38.21 +1.19 +3.21%) continued its roll and has a Bullish Engulfing Pattern. The bear market that kicked the past week is going to have strong bounces for bulls, but I wouldn't touch this one. AB gives FXI a Buy-If tag. Meanwhile, it gave FXP (UltraShort FTSE-Xinhua China 25) a Sell-If designation. Bearish Engulfing Pattern, the Darth Vader of patterns.

• GLD (115.22 -0.62 -0.54%) dipped a lot more than I expected, but the run up was strong. Maybe one day it'll really interest me. But frankly, copper makes more sense, especially when China's growth accelerates again one of these years. Then again, maybe some crazed despot emperor will build a mile-wide palace with gold.

• GS (140.62 +4.52 +3.32%) has a Buy Confirmed tag at 137.08 today. GS still spooks me because of that massive selloff recently. It simply refused to rally on bullish days in the market. Today was different. The banksters are back.

• IMAX (17.89 +0.43 +2.46%) has is on Wait status on AB. It was available at 17 yesterday. It can easily run back to 20, but I don't see enough of a catalyst right now. Might never. There's no Avatar in the near future.

• QQQQ (44.84 +0.49 +1.10%) is an afterthought, really, as long as AAPL is a great company and stock. When AAPL tanked from 244 to 238-plus, I considered a position in QID (short Nasdaq). Glad I stayed out. I have no feel for QID whatsoever.

• SCO (17.33 -0.07 -0.40%) is rated a Sell Confirmed by AB even as crude oil dropped to recent lows this week. SCO (UltraShort DJ-AIG Crude Oil) is on my watch list, but I don't expect to trade it. Crude oil and what moves its price, quite mysterious. USO (US Oil Fund ETF) is unbought (Wait) on AB. Crude is at a pivotal point and could break down. The Euro was at a similar point two days ago and bounced.

• STD (10.98 +0.57 +5.47%) up big today with the rest of the financials. Spain's biggest bank has been fairly resilient, but is still at the low end of its chart over the past year. More than Greece, I think STD could make a Citi-like rebound. AB has a Buy Confirmed on STD.

• TMF (41.46 +0.22 +0.54%) has been enjoyable to watch, an ETF for 30-year treasuries ... but lacks volume (74,000 shares today). TLT is the much more liquid offering and has been a hold by AB for a couple of days. TLT (98.43 +0.10 +0.10%) is a 20-year treasury bond fund that traded 18.6 million shares today.

• VXX (33.31 -0.76 -2.23%) was a buy by AB 15 days ago at 24.01 and remains a hold. A rare winning "trade" by AB on the VXXen. Though it decays because of its internal nature, this is a rare period of time when holding VXX has benefited better than trading it, really. It has basically doubled in the past month after spiraling down from 100-plus more than a year ago. The financial, credit and debt chaos around the globe coming in the next several months give VXX buy-and-holders an edge, maybe. Just be prepared for sudden gapdowns overnight if and when the climate improves and fear simmers.

That's enough for now.

VXXen: a vicious kitten