Economic security

Dow Jones Rally Just a ‘Dead Cat Bounce,’ US Stock Market Could Crash 30%: David Tice

The recent Dow Jones rally is a “dead cat bounce” because the stock market is going to tank and a recession will eventually cast a dark shadow over the US economy. That’s the bleak prediction of investment perma-bear David Tice, who previously managed the aptly-named Prudent Bear Fund.

A dead cat bounce is a brief recovery from an extended bear market that’s followed by a prolonged downturn. Basically, that’s where Tice thinks the US stock market is right now.

Looking ahead, Tice claims a 10 to 30 percent market plunge looms on the horizon, so Wall Street shouldn’t get overconfident because of the recent bull runs.

“This is a rally inside a bear market,” Tice told CNBC on February 7. “We believe we are now in a bear market. The 200-day moving average was crossed back in October…We could have something between a 10 percent and a 30 percent decline [this year].”