Term of the day – Whipsaw

Our term for the day is Whipsaw.

Whipsaw describes the movement of a security when, at a particular time, the security’s price is moving in one direction but then quickly pivots to move in the opposite direction. There are two types of whipsaw patterns. The first involves an upward movement in a share price, which is then followed by a drastic downward move causing the share’s price to fall relative to its original position. The second type occurs when a share price drops in value for a short time and then suddenly surges upward to a positive gain relative to the stock’s original position.

Term of the day – Bellwether Stock

Our term for the day is Bellwether Stock.

According to Investopedia:

A bellwether stock is a stock believed to be a leading indicator of the direction of the economy or of a sector of the market or the market as a whole. Bellwether stocks are typically large-cap equities. When they report strong earnings that may indicate the economy is strong. Their market performance may also signal how a sector or the market as a whole is likely to perform.