Cognitive Scaffold

Preparing your thinking workspace

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MENTAL MODEL · M1807

Dead Cat Bounce

Dead Cat Bounce
BusinessHigh supportFinance
Included
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Version 1.0.0 · Updated 2026-07-30

CORE DEFINITION

A temporary, small recovery in the price of an asset after a sharp decline. It originates from the saying: "Even a dead cat will bounce if it falls from a high enough height."

SCAFFOLDING EFFECT

psychology

Reduce cognitive load

- Bull trap: In a downtrend, do not mistake a brief rebound for a reversal (the arrival of the bottom). Stay calm and do not catch a falling knife halfway down.

anchor

Anchor fast decisions

A temporary technical rebound (dead cat bounce) in a downtrend, not a trend reversal, often caused by short covering and other factors.

MINIMUM ACTION

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Source support: Explicit

  • link
    en.wikipedia.orghttps://en.wikipedia.org/wiki/Dead_Cat_BounceZH · Explicit
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