A Dead Cat bounce is a trading term derived from the theory that if you drop something from high enough it will bounce. Traders often talk of dead cat bounces after a sustained bear market at some point the market fall has to stop and buyers and traders shore up prices as they attempt to get back into the market snaffling at prices too good to be true. Often this fall is for no other reason than sentiment that levels are too good.

Yesterday we saw a small rise in prices mainly on the back of a small increase in oil prices. This has been caused by rumours of an decrease in Opec production. In reality Opec does not officially meet until December and many of them need to sustain production for cashflow. In fact only Saudi Arabia can afford to shore up prices, and their hold on the cartel is significant but the hold that the cartel has on world oil prices is decreasing. Venezuala a huge oil exporting country has a new president who has leveraged many foreign policy ideas on the back of their oil price, they need the cash and for oil to flow, but world demand is declining and this will put further bearish pressure on oil. Many commentators suggest that we could be returning to the $50 mark again and hence the reason why this recent rise might well be a dead cat bounce.