Guide to The Bull And Bear Market

The bull market in a stock market bears prices that are sustainably oriented upward, in a sufficiently long time (weeks, months or years). It reflects the optimism, justified or not, traders believe the market holds more opportunities than risks.

A bear market is sustainably oriented downward, it embodies a consequence of pessimism, founded or not by the traders. They believe that listed companies are more likely to bear less earning potential, and thereby agree to sell at a lower price (or, for those acting in return, accept to buy at a lower price).

In this context, other terms are often used:

    * The boom is a period of sharply rising prices (ie a strong bull market)
    * The crash is similar to a strong period of falling prices (ie a strong bear market)
    * A “rally”, and runup, is a strong acceleration of market movement within a bull or bear market
    * A “correction” is a strictly limited time counter-movement of the courses (such as a short-term bearish phase within a parent bull)
    * A “market cycle” consists of a bull and a bear market
    * Both bull and bear markets are based on different periods of time.

The stock market distinguishes between bear and bull market, money is made by skeptic speculation. The bull market buys in the hope of recovery. And a long-term bull market is something that investors hope for.

The bear market is accompanied by a decline in investor confidence as well as expectations of future losses. Both the bull and the bear market may by fundamental economic transformations, especially the economic cycles, which are also caused by speculation.

Exaggerated income expectations lead to a speculative bubble. On the other hand, an exaggerated bear market leads to falling investor expectations leading to a stock market crash.

The transition between bull and bear markets are hard to interpret. Particular attention should be on positive or negative effects. A series of positive developments often characterizes a bull market, a series of negative surprises a bear market.
 

…………