Dead cat bounce

from Wikipedia, the free encyclopedia
Several dead cat bounces in the second half of 2000 and in 2001 after the dot-com bubble burst ( NASDAQ Composite Index ).

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