Ok, but a “falling knife” isn’t going your direction while a “falling knife + reversal” has drawn a line in the sand and is going your direction. That’s what been said about waiting for the knife to hit the floor and catch the bounce.
I don't know. May work well for you? What I do know is every time I did that, I regretted it afterwards.
Well if you watch the beginning of The Dark Knight Rises that is exactly what happens. It's a pretty cool scene with Bane in the CIA airplane -- almost Bondesque.
Translation: On the one hand, the market could go up to new highs by years end. On the other hand, there could be sharp sell-offs over the next month or so. As a result of the market going to new highs or sharply selling off, or doing neither, volatility, for now, remains favorable for option writers. [This is neither a solicitation to buy or to sell. Never do anything without first consulting with your Broker.]
Maybe you could catch knives if you can first make money trend following. I would switch to a shorter timeframe where the true range of each bar is about the same as before the falling knife. Then just use your trend following rules to get you back in on what may be termed a "bounce". But it's really just a trend change on the shorter time frame. Switch back to your initial time frame as true range goes back to more normal.