Bull Trap
A false rally that lures buyers in before resuming its decline — a classic bear-market whipsaw.
A bull trap is a deceptive upward move — often a breakout above resistance or a sharp bounce in a downtrend — that convinces buyers the bottom is in, then reverses and continues lower, trapping those who bought the rally at a loss. Bear markets are punctuated by them.
They’re partly structural: sharp counter-trend rallies are common in downtrends (short covering, hope, dead cat bounces), and each one tempts sidelined buyers. The defense is skepticism toward rallies that lack broad confirmation, and position sizing that survives being wrong. Its downside mirror is the bear trap. Recognizing traps is less about prediction than about not betting the farm on any single move.