Dead cat bounce

You may have heard of something called the dead cat bounce. This is used in the markets where you see a big decline first, followed by a bit of a recovery and then a further decline in the price. This is where the world markets might be around this time.

For some reason, I was thinking about this yesterday on my way home from work. Someone said that this expression is used because even when you throw a dead cat from high enough and with enough speed, it will bounce. Hence the name “dead cat bounce”. However, I think this is incorrect because the cat would simply end up on the floor after the bounce as it’s dead. In the real world, you tend to see a big recovery after sharp corrections, not a flat sideways market. So, the market doesn’t simply roll over and die, instead, it tends to start climbing again.

A more apt description would be a cat falling from a tree. It crashes down, lands on its paws, might hurt itself a bit in the process but then recovers and continues climbing trees happily ever after. Until it, all repeats again.

I realise this might be one of the silliest posts so far, but I felt like sharing. I promise there will be less of this kind of stuff in the future.

PS: Don’t take yourself too seriously!