#MarketRebound What causes the market to recover?

The market can recover for many reasons. A sharp decline can lead to overselling when fundamental factors support higher prices. This can cause investors to take a more objective view on buying rather than selling out of fear. Demand for stocks may also increase as the economy recovers from a recession. Increased demand and business growth indicate higher profits and higher stock prices.

In the short term, the recovery may be driven by more technical factors, but these factors tend to exist for a short time. For example, a dead cat bounce may result from covering short positions or technical traders mistakenly believing that the bottom has been reached. Ultimately, a dead cat bounce is not based on fundamental factors, so the market continues to decline immediately afterward.