A dead cat bounce is a temporary, short-lived recovery in the price of a declining asset, followed by a continuation of the downtrend. The term comes from the idea that even a dead cat will bounce if it falls from a great height. Traders watch for dead cat bounces to avoid being tricked into buying what appears to be a reversal but is actually just a brief pause before further decline.
Example
“After crashing 40%, the stock rallied 8% over two days, but it turned out to be a dead cat bounce as prices resumed falling the following week.”