Dead Cat Bounce
DEFINITION of 'Dead Cat Bounce'
A temporary recovery from a prolonged decline or bear market, followed by the continuation of the downtrend. A dead cat bounce is a small, short-lived recovery in the price of a declining security, such as a stock.
Dead Cat Bounce
What It Is:
A dead cat bounce refers to a temporary recovery in a stock price or a temporary market rally after a significant downward trend.
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Dead cat bounce
Dead Cat Bounce
The first part of the dead cat bounce pattern consists of a massive drop in prices (the average being roughly 31%), and is often accompanied by a large gap down (Bulkowski, 2005).
dead cat bounce Industry slang for a brief minor move higher during a bear market. For example, I wouldn't chase XYZ. It looks like an old fashioned dead cat bounce to me.
dead duck An archaic slang term for a ruined speculator.
A temporary recovery from a prolonged decline or bear market, after which the market continues to fall.
Dead Hand Provision ...
A small upmove in a bear market.
In investment banking, the rate at which new deals are referred to a brokerage firm.
The ~ is a very quick pattern. It occurs after a giant down day in a stock caused by a news event.
bump and run
A bump and run chart pattern is a reversal pattern. It occurs after a large uptrend.
The debt to equity ratio measures what proportion of equity and debt a company is using to raise money, and is calculated as follows: ...
A ~ describes a situation where price activity sees a modest upward move after a long downtrend. The bounce is limited, however, as the downtrend ultimately reasserts itself later.
Days To Cover ...
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~ A rebound in a market that sees prices recover and come back up somewhat. Debit Spread The difference in value of two options, where the value of the long position exceeds the value of the short position.
The first day is a long white candle which supports the trend. The second day opens above the high of the white day but closes below the midpoint of the range of the first day. Dead Cat Bounce - A rally within a bear market.
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A trend-follower may be inclined to say ‘dead cat bounce’ (and a temporary one, to be clear). And, he/she may well be right.
The US dollar had a big rally from July until just a few weeks ago as the dollar started an avalanche slide putting in a small dead cat bounce last week.
As the security moves lower, traders use each dead cat bounce as an opportunity to add to their short positions. Over time, as the number of traders short continues to increase, there develops an imbalance of supply and demand.
Many patterns are covered, including the inverted dead cat bounce, busted chart patterns and event patterns (e.g., earnings releases). The author pinpoints what chart patterns work and don’t work based on extensive research over decades.
We expect the right shoulder to top out in the ambush zone or the blue line which lines up with left shoulder. After we breach the neckline, we might get a dead cat bounce, followed by a measured move down. The measured move should be the approx.
The second wave of buying comes into play once the strong shorts realize that this is not just a dead cat bounce, but that the move has legs. This will produce the second bounce, which will often precede the short-term top in the counter move.
On LNG, note as a trader the candles I mentioned which showed major buying pressure. You could have rode a brief but violent dead cat bounce to the upside if you had a long signal. But also note how short lived that move was, and then read my signature line again.
A full gap down occurs when the price is below not only the previous day's close, but the low of the day before as well. A stock whose price opens in a full gap down, then begins to climb immediately, is known as a 'Dead Cat Bounce.' ...
See also: What is the meaning of Stock, Trading, Market, Short, Trader?