Dead cat bounce

In economics, a dead cat bounce is a small, brief recovery in the price of a declining stock.[1] Derived from the idea that "even a dead cat will bounce if it falls from a great height", the phrase, which originated on Wall Street, is also popularly used to any case where a subject experiences a brief resurgence during or following a severe decline.



The term "dead cat bounce" is derived from the idea that "even a dead cat will bounce if it falls from a great height."[2] The phrase has been used on Wall Street for many years. The earliest use of the phrase dates from 1985 when the Singaporean and Malaysian stock markets bounced back after a hard fall during the recession of that year. Journalists Christopher Sherwell and Wong Sulong of the Financial Times reported a stockbroker as saying the market rise was a "dead cat bounce."[3] A similar expression has an older history in Cantonese and this may be the origin of the term.

Variations and usage

A short rise in price of a stock which already suffered a fall is the standard usage of the term. In other instances the term is used exclusively to refer to securities or stocks that are considered to be of low value. First, the securities have poor past performance. Second, the decline is "correct" in that the underlying business is weak (e.g. declining sales or shaky financials). Along with this, it is doubtful that the security will recover with better conditions (overall market or economy).

Some variations on the definition of the term include:

  • A stock in a severe decline has a sharp bounce off the lows.[4]
  • A small upward price movement in a bear market after which the market continues to fall.[5][6][7]

Technical analysis

A "dead cat bounce" price pattern may be considered part of the technical analysis method of stock trading. Price patterns such as the dead cat bounce are recognized only with hindsight. Technical analysis describes a dead cat bounce as a continuation pattern that looks in the beginning like a reversal pattern. It begins with a downward move followed by a significant price retracement. The price fails to continue upward and instead falls again downwards, and exceeds the prior low.[8]

Alternate meanings

The term has also been used in reference to political polling numbers[9] and car sales: "Saab has survived a near-death experience and is back selling cars, although the jury is still out on whether it's a dead-cat bounce."[10]

See also


  1. ^ Business Dictionary web site
  2. ^ Investopedia
  3. ^ Chris Sherwell, "Singapore stock market stages modest recovery after steep fall," Financial Times, December 7, 1985, quoted in Word Spy
  4. ^ My Stock Market Power
  5. ^ Traders101 web site
  6. ^ The Phrase Finder
  7. ^ Investopedia web site
  8. ^ Traders Log web site
  9. ^ Is this Gordon Brown's dead cat bounce?
  10. ^ [ Sydney Morning Herald article "Born again" by Toby Hagon, April 23, 2011

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Look at other dictionaries:

  • Dead Cat Bounce — im 2. Halbjahr 2000 nach dem Platzen der Dotcom Blase (NASDAQ Composite Index) Der Dead Cat Bounce (dt. Hüpfer der toten Katzen) ist eine Metapher des Kapital und Börsenmarktes. Er beschreibt das Phänomen, dass in einem Börsenkrac …   Deutsch Wikipedia

  • Dead-Cat-Bounce — (dt. Hüpfer einer toten Katze) ist eine Metapher an den Finanzmärkten. Sie beschreibt die nicht nachhaltige Erholung eines Wertpapierkurses oder Wertpapierindex nach einem starken, meist länger andauernden Einbruch. Der Begriff ist abgeleitet von …   Deutsch Wikipedia

  • Dead cat bounce — A small upmove in a bear market. The New York Times Financial Glossary * * * dead cat bounce dead cat bounce ➔ bounce2 * * *    A rise in the price of a financial instrument, or an overall market, after a prolonged fall. This is likely to be… …   Financial and business terms

  • dead cat bounce — A small upmove in a bear market. Bloomberg Financial Dictionary * * * dead cat bounce dead cat bounce ➔ bounce2 * * *    A rise in the price of a financial instrument, or an overall market, after a prolonged fall. This is likely to be followed by …   Financial and business terms

  • dead cat bounce — (ded kat BOWNS) n. A temporary recovery from a major drop in a stock s price. Also: dead cat bounce. Example Citations: After glancing at the top performing funds of the second quarter, investors may be forgiven for wondering if they have somehow …   New words

  • dead-cat\ bounce — Wallstreet expression describing the phenomenon of a stock bottoming out to near nil and then recovering with a sharp buying spree from bargin hunters. The notion being that even a dead cat will bounce if dropped from a high enough point. Enron… …   Dictionary of american slang

  • dead cat bounce — n. Stock Market a temporary recovery in share prices after a substantial fall, caused by speculators buying in order to cover their positions * * * ˌdead cat ˈbounce [dead cat bounce] noun a temporary and small upward movement in share prices… …   Useful english dictionary

  • dead-cat bounce — /ded kat / Slang. a temporary recovery in stock prices after a steep decline, often resulting from the purchase of securities that have been sold short. * * * dead cat bounce noun (stock exchange sl) A temporary recovery of share prices following …   Useful english dictionary

  • dead-cat bounce — very little recovery after a loss, not coming up again    The broker said, It was a dead cat bounce. Stocks remain low …   English idioms

  • dead cat bounce —    a temporary increase in the value of a security or currency of which the price has been falling but which remains overvalued    Like a rebound of a corpse dropped on a hard surface:     Dealers in the Russian market, however, still think a… …   How not to say what you mean: A dictionary of euphemisms

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