Dead Cat Bounce

Market Terms

We don't know everything about the markets.  We're just devoted to learners.  Taken from those smarter than ourselves, here's how we define Dead Cat Bounce.

An example of a sucker’s rally, a Dead Cat Bounce is a temporary and short-lived uptrend within a prolonged decline/bear market that is followed by a continuation of prevailing downtrend.  Small rallies are frequent in downtrends, but must be taken for what they are (brief blips within a larger trend).  A Dead Cat Bounce is considered to be a continuation pattern, where at first the bounce may be taken as a reversal, but is then quickly overtaken by a continuation of the downward momentum.  Of note, dead cat bounces are typically only seen in hindsight and are difficult to identify in real-time.