Wall Street has a bunch of wacky phrases to explain away even the simplest of stock movements. We did a list of 6 of the most ridiculous ones, but we left off the ‘dead cat bounce’ idea.
This notion interprets that the day after a massive selloff (like yesterday’s 777) will see a moderate an temporary rise before resuming its downward movement. The full phrase explains this phenomenon by saying, ‘Even a dead cat will bounce if it falls from a great height.’
Pretty sick, right? Of course no one is actually talking about launching deceased pets out of office windows to predict the market, it’s just a saying, but the connotations are gruesome nonetheless.
So that appears to be what we have today. However, this may also be a legitimate rally in the stock market seeing as how the politicians are waking the hell up and getting serious about a new bailout plan. That fact alone is injecting some optimism into the markets today.
So what’s your opinion? Is this legit or just some cats jumping out windows again?
(Here is what the Dow looks like midday today [9/30] as it gains strength after yesterday’s massive sell off.)