They say that what comes up must go down, but an equally true and less discussed phenomenon is that what goes down must come up. At least, sometimes.
The idea of a “dead cat bounce” might sound somewhat alarming, but as long as you hear it mentioned within the context of trading, it refers to a particular phenomenon in the stock market.
The phrase comes from the idea that even dead cats will bounce if they fall from a high enough point. When asset prices reach high levels and then drop, they may recover temporarily — even though the asset is ultimately “dead” and will fall straight back down again.