Subramanyan
02-10 16:08

Honestly,  I personally feel this could be an classic case of dead cat bounce driven & heavily influenced by short covering—traders exiting bearish bets rather than new long-term buyers. Secondly, this is reminiscent of low convictions: Trading volume during the rebound was approximately 13% below the five-day average, indicating a lack of broad market participation. Thirdly,  trump is causing a whole lot of confusion: implied volatility remains elevated, suggesting investors are still pricing in significant future price swings. Finally, this  requires observing if the price eventually drops below its recent lows. Follow-through in the coming days will be critical in deciding if this move represents seller exhaustion or merely a temporary reprieve aka dead 🐈 syndrome.

Is Market Rebound a Dead-Cat Bounce or Real Turn?
After last week’s AI-led selloff, US equities staged a $1 trillion rebound, with the S&P 500 posting its best single-day gain since May. Yet confidence remains thin. Implied volatility is still elevated, trading volume ran ~13% below average, and Goldman’s short-bias basket jumped ~9%, hinting the rally was driven by short covering rather than fresh conviction. Investors are struggling to price a murky US outlook while reassessing AI’s winner-takes-all impact, especially on software. Is the rebound a dead cat bounce? Would you add stocks now?
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