Dead Cat Bounce
A dead-cat bounce is a short, technical rebound inside a larger decline — the cat bounces, but it is still dead — not a regime change.
Definition
After a waterfall, shorts cover and forced sellers pause; price lifts 5–15% on light or one-way covering. The fundamental or flow impulse that caused the break is intact. Distinguishing it from a genuine trough is the whole skill — and mostly luck plus positioning.
Why it matters
Buying every bounce in a solvency crisis is how books die. Fading every bounce in a V-shaped policy response is how they miss the year.
Case
October 2008 and June 2008 rallies inside the GFC; March 9–18 2020 was *not* a dead cat — policy rewrote the discount rate.
How to read it
Check credit, the dollar, and breadth. A price bounce with new credit lows is a cat. A bounce with a CB backstop and a vol crush may be a regime.