While the Summer Travel Rally is Over, a Bounce is Coming

Leading into summer, airline stocks were among the best performers. [Jeff Clark's Market Minute]( While the Summer Travel Rally is Over, a Bounce is Coming By Jeff Clark, editor, Market Minute Leading into summer, airline stocks were among the best performers. But now the peak travel season is over. And so is the airline rally – airline stocks have given up all the summer gains. Investors should stay away. But for traders, it’s a different story. I’ll explain why a short-term bounce looks imminent… Recommended Link [Watch SHOCKING Footage of AI Facility with Ties to Elon Musk]( [image]( I recently traveled more than 3,000 miles and [shot this video outside what could end up being Elon Musk’s biggest secret.]( Most people don’t know about this facility, but it could be the most important AI project in the world. What’s happening inside these walls is so important that our government has declared it a matter of national security. [Click here to see the details because this will definitely impact you and your family.]( -- The NYSE Airline Index (XAL) contains big names like American Airlines (AAL), JetBlue Airways (JBLU), and Delta (DAL), amongst others. Take a look at the rise, and subsequent fall, of XAL… [(Click here to expand image)]( After flying sharply higher from May until July, the airline index has completed a round trip. It has given up the entire summertime rally. The index is now deep in oversold territory. The MACD momentum indicator at the bottom of the chart is more oversold than at any time since last October. And, it looks like the airline stocks are set up for a “dead-cat bounce.” A dead-cat bounce is based on the premise that if you tossed something as worthless as a dead cat off the top of the Empire State Building, it would bounce when it hit the ground. If we apply that theory to the stock market, then even the most worthless, piece of garbage stock is likely to bounce once it has hit bottom. Those bounces happen fast and they can produce large moves. For example, Target (TGT) fell from $160 to $124 in early June and was so oversold it bounced $13 higher in just three days. There was no news to account for the rally. The stock had simply gotten so oversold that a bounce was inevitable. Academy Sports and Outdoors (ASO) is another good example. The stock fell from $60 down to $50 in August. It got so oversold that it recovered more than half that loss in two days. Shares of Fortinet (FTNT) also dropped hard in August, falling from $80 to about $57. The stock rallied 12% earlier this month. Free Trading Resources Have you checked out Jeff's free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. None of these are fly-by-night companies, by the way. They’ve been around for a while but are just experiencing cyclical difficulties. And it may be a while before business is firing on all cylinders again. So, it’s probably too early to look at these dead cats as intermediate- or long-term value trades. Anyone interested in trading dead cats should only do so on a short-term basis. Right now, the airline sector looks poised for a dead-cat bounce. If it plays out, the index could be 8% to 10% higher in the next few days. But don’t overstay in the trade... Because dead cats will always bounce when they hit the ground. But when the bounce is over, they fall right back down again. So, collect your profits when you have them, and get out. Best regards and good trading, [Signature] Jeff Clark READER MAILBAG Do you take advantage of dead-cat bounces? Let us know your thoughts – and any questions you have – at feedback@jeffclarktrader.com. IN CASE YOU MISSED IT… [Up to 340% Gains… Courtesy of the US Government]( A new government bill allowing for limitless spending has Wall Street circling [this stock]( like sharks… Goldman Sachs, Wells Fargo, Citadel, and more are all buying! [Click here for full details.]( [image]( [Jeff Clark's Market Minute]( Jeff Clark Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.jeffclarktrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. Jeff Clark Trader welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-800-752-0820, Mon–Fri, 9am–7pm ET, or email us [here](mailto:contactus@jeffclarktrader.com). © 2023 Omnia Research, LLC. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Omnia Research, LLC. [Privacy Policy]( | [Terms of Use](