What is Foolsaurus?

It's a glossary of investing terms edited and maintained by our analysts, writers and YOU, our Foolish community. Get Started Now!


Dead cat bounce

A dead cat bounce is the temporary uptick in a stock's or market's price following a large market sell-off, similar to the moves a cat would make when it is thrown off a building.

Expanded Definition

A dead cat bounce can be caused by investors thinking the worst is over and moving back into a stock, or even by short sellers covering their positions as much of the downside advantage has been removed. Many investors get fooled into thinking that the stock will now rally after a seeing a bounce after a steep sell off, but usually the stock falls further or flatlines hence the name dead cat bounce.

Recent Mentions on Fool.com

Advertisement