
A dead cat bounce is traditionally described (for example Investopedia) as “a small, brief recovery in the price of a declining market”. We day traders like to look at it a bit differently – because when we anticipate these bounces, we can take profits smartly and quickly. For us, a dead cat bounce is the pull back we see after a very strong reaction to a news item, or any quick, strong movement, either up or down. The typical behavior to a significant news announcement is very strong movement, very quickly. [Read more…]