Dead cat bounce
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Dead cat bounce (English hops a dead cat ) is a metaphor to thefinancial markets. It describes the unsustainable recovery of a security price or security index after a strong, usually long-lasting slump. The term is derived from thecynicalEnglishsaying: “Even a dead cat will bounce if it is dropped from high enough! ”(German:“ Even a dead cat will bounce up if it is dropped from a sufficiently high height! ”). Thus, after a short climb, the course continues to collapse.
Differentiation from the bull trap
In itself, the very fact of such a development is an extreme type of bull trap . However, the dead cat bounce usually has more far-reaching consequences for the investor because of the subsequent stock market crash and is more characteristic. As a result of the stock market crash, a large number of securities , entire sectors of the economy and financial markets are also affected. A bull or bear trap, on the other hand, can occur in any market situation, often occurs with individual values and is not unusual.
Differentiation from the salami crash
The salami crash is more insidious and slower. A dead cat bounce occurs much more suddenly and is preceded by a recovery.
Web links
- Michael Maisch: Friedhof der Kuscheltiere ( Memento from October 30, 2007 in the Internet Archive ). In: Handelsblatt , October 25, 2007.