What is a dead cat bounce in stocks?

A dead cat bounce is a temporary recovery in stock price after a sharp decline. The idea is that even a dead cat will bounce if dropped from high enough. It can signal either a genuine bottom or just a brief pause before further declines.

Did IREN recover after the earnings miss?

IREN bounced from $39.80 to $41.80 the day after its earnings miss — a 5% recovery. Volume was 20% above average, suggesting real buying rather than just a weak bounce. Whether it continues higher or fades remains to be seen.

Should you hold a stock after an earnings miss?

It depends on whether the miss was due to temporary factors or fundamental problems. If the long-term thesis is intact, holding through volatility can work. If the business is broken, cutting losses quickly is usually better. In IREN's case, the AI cloud transition story remains intact despite the Bitcoin mining revenue collapse.

AI Stock Experiment Day 6: The Dead Cat Bounces | Best or Worst Idea

Day 6: The Dead Cat Bounces

February 6, 2026 · Day 6 of 90

Following along? I'm running this experiment in Robinhood — commission-free stocks and options. Sign up here and get a free stock.

From Bloodbath to... Less Blood

Yesterday was ugly. IREN missed earnings badly, dropped 17%, and I watched my position crater to -9.3%. I went to bed wondering if I should cut losses at open.

Then after-hours happened. The stock stabilized in the high 30s. Briefly touched $40. By morning, pre-market was looking... not terrible?

Sometimes the best move is no move at all.

The Recovery

At open, IREN pushed through $43 — briefly putting me back at break-even. For a moment, I thought about taking the gift and walking away flat.

I held.

The stock faded through the day but found support. Closed at $41.80. Stable in after-hours.

📈 The Bounce

Yesterday's close: $39.80
Today's high: $43.32
Today's close: $41.80
Volume: 20% above average

A 5% recovery on heavy volume. Real buying, not just a dead cat bounce. Maybe.

Why I Held

Three reasons:

Volume confirmed the move. 20% above average means institutions are buying, not just retail gamblers covering shorts.
The thesis isn't dead. Yes, earnings missed. But the Microsoft contract is real. The AI cloud transition is happening. They have $9.2B in funding secured. This is execution risk, not existential risk.
Panic selling rarely works. If I sold at $39.80 yesterday, I'd be kicking myself today. The time to cut was before earnings, not after.

That said, I'm not married to this position. If Monday opens weak, I'll reassess.

Current Position

Ticker	Shares	Entry	Current	P&L
IREN	22.4	$43.02	$41.80	-$27 (-2.8%)
VNDA	2	$7.59	~$7.50	~$0 (lottery)

Scoreboard

Starting Capital	$1,000.00
Current Value	~$951
Total Return	-4.9%
Day	6 of 90

The Weekend Plan

Markets are closed. Time to do homework.

The congressional trading strategy didn't work perfectly on IREN — we bought too close to earnings and got burned. But the core idea isn't wrong. Politicians with committee oversight consistently outperform the market. The edge is real.

Over the weekend, I'm scanning for:

Fresh filings — who's buying what right now
Upcoming catalysts — earnings, FDA dates, contract announcements
Better timing — getting in earlier, not the day before binary events

If IREN recovers to $45+, I might take profits and rotate into something cleaner. If it fades, I'll cut and move on.

Either way, the experiment continues.

What I Learned This Week

Congressional trades are a signal, not a guarantee
Holding through earnings is gambling, not trading
Sometimes the best trade is no trade
Recovery days on high volume are real — don't panic sell into weakness

One week down. 84 days to go. Still alive.

Want to try this yourself? I'm using Robinhood for commission-free trading. Sign up with my link and we both get a free stock.

Disclaimer: This is a personal experiment for entertainment and educational purposes, not financial advice. Trading stocks and options involves significant risk — you can lose some or all of your money. I am not a licensed financial advisor. Congressional trading data is publicly available but should not be construed as a recommendation. Do your own research before making any investment decisions. Past performance does not guarantee future results. If you sign up for Robinhood using my link, I may receive a referral bonus at no cost to you.

Day 6