A situation that occurs when sellers are trapped in a rising market. When the pressure from increasing losses mounts, they begin to buy their way out of their losing positions which fuels the upward price momentum and further panic buying among the shorts that are still in the market. A professional trader will sometimes try to take advantage of a bear squeeze by buying long into the upward price pressure and then selling short when the momentum begins to weaken. He will then ride the price back to a correction point, take his profit, and reenter the market as a buyer. Compare to bull squeeze. See Bear Trap; Bull Trap; whipsaw.
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