Day Trading Setups
Dead Cat Bounce Short (Bear Rally Fade)
A stock in a real downtrend prints a sharp corrective bounce off the swing low. This tool measures the real retracement of that bounce against the down-leg it came from, live, bar by bar, so you can test whether a deep bounce actually fails more often than a shallow one.
Watch the bounce, read the retracement, call the short
A downtrend leg plays out first, real declining candles from a swing high down to a swing low. A bounce then forms off that low. As each bounce candle prints, the tool measures its real retracement of the down-leg using actual high and low math. You can call Short the Bounce at any point while it is still forming, or Wait for more of the bounce to print.
Building the downtrend leg…
| Retracement depth at entry | Trials | Short won | Win rate |
|---|---|---|---|
| Shallow (<38%) | 0 | 0 | — |
| Medium (38–61%) | 0 | 0 | — |
| Deep (>61%) | 0 | 0 | — |
How it works
- The down-leg is measured from a real swing high to a real swing low. That range, high minus low, is the yardstick every later retracement percentage is measured against.
- The bounce's retracement is computed live off its own real high. As each bounce candle prints, its high minus the swing low, divided by the down-leg's own range, gives the real retracement percent shown on screen at that instant.
- Committing to Short the Bounce locks in the retracement percent at that moment. That number is what the trial gets bucketed by later, not the deepest retracement the bounce eventually reaches.
- The short is graded on real forward bars. Continuation-Down means the price closes back below the bounce's own starting point, the swing low area, before the sequence ends. Failed-Short means the bounce kept extending past where you shorted it.
Where this breaks
A deep bounce is not automatically a better short than a shallow one
The intuition behind a dead cat bounce short is that a corrective rally inside a downtrend eventually runs out and rolls back over, but how deep the retracement gets before it fails is not fixed. A shallow bounce can mean sellers never lost control, or it can mean the stock is about to grind sideways and chop out an early short. A deep bounce past the 61% mark can mean exhaustion, or it can mean the trend has actually changed and the short is wrong entirely. The bucketed table in this tool shows real differences between shallow, medium, and deep entries, but none of the three buckets wins every time, retracement depth shifts the odds, it does not replace a stop.