A temporary recovery in the price of a financial instrument which has fallen rapidly and is expected to fall further in the long run.
Etymology:
- From the idea that a cat dropped from a height might bounce without this indicating any actual life after hitting the ground.
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Now, if you look at the chart of a stock that has suffered a collapse, you will see that at the bottom of each drop there is a small uptick, a rise in the price. This uptick, representing the smart money getting out because it knows what is coming, and fools getting in because they don't, is known as the dead cat bounce, so-called because if you drop a dead cat off a skyscraper the cat will bounce, too, but the movement doesn't mean the cat is alive.
Submitted on July 10, 2018
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"dead cat bounce." Phrases.com. STANDS4 LLC, 2024. Web. 25 Dec. 2024. <https://www.phrases.com/phrase/dead-cat-bounce_25453>.
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