Limitations in identifying a dead cat bounce
The biggest challenge of trying to identify a dead cat bounce is that it cannot be reliably done until it has already occurred. As an example, after the S&P 500(SNPINDEX:^GSPC) declined sharply in March 2020 due to the pandemic and then started to reverse course, many analysts initially considered the rally to be a dead cat bounce. With the value of the S&P 500 increasing dramatically since that time, it's clear — in hindsight — that those analysts were wrong.
^SPX data by YCharts.
If technical stock analysis was reliably correct, then it would be easy to get rich by putting money into the stock market. Correctly identifying a stock price's low point or the start of a price rally is tantamount to attempting to time the market.
Even old Motley understands the correct meaning of a dead cat bounce?
Cheers
FireflyOne
RAC - Charts & Price Action, page-11113
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