If you had noticed, the stock market chart of Singapore has recently sort of climbed up again since the gobal financial storm last year. As of March this year, the STI was at around 1457 but it has since went up to 2029 this month. Of course in these kind of situations where the market rises after a sharp fall, there will be rumours about this and that
Some people said that it signifies the arrival of the bull market and investors should look at it with a positive state of mind. On the other hand, there are others who think that it is just another bear market rally or another term for it is called dead cat bounce
Dead cat bounce is a symbolic term used in the finance fratenity. It's original meaning is that a dead cat will still bounce even if it falls from a high place because it has nine lives but it is still dead at the end of the day. Similarly, the recent rise in the stock market might just be a temporary one before going down again
So why the sudden increase? Traders might be predicting a downfall where they can buy shares at "cheap cheap" prices and hope that a bounce, which happens frequently, will occur thus profiting from this entire thing. So if everyone is thinking what everyone is thinking, then all these predictions will turn into reality with people buying in non-stop
It might also be because many investors are buying stocks at the same time as they think it has plunged deep(and cheap)enough for them to part with their money, hence creating a sudden rise in the market
For whatever reason that people think the recent increase is, I believe that the bull market will not be back yet and this could possibly be yet another dead cat bounce. Well, we should be glad that there is something called dead cat bounce in the stock market because I don't think you can find it in football odds
The bull is still hibernating...
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