We All Love A Bull Market

By Mike Swanson

The terminology Bull market and bear markets are generally used to describe the direction of the market either up or down. Stock prices up and down both during a trading day, and from one day to the next. But terms such as bull and bear describe the trend over the long term. Many analysts use a minimum analysis period of two years to determine if a change is a trend or just a change. They also feel the market needs to move at least 20%.

The term bull market is when the stock market is increasing in price. These increases usually begin when the market is at its lowest ebb. You can see with gold stocks over the past few years. When the cycle changes and things begin improving the investing market feels there are profits to be made.

When a bear markets occurs there is a period of constant stock price decline. The decline is not in one stock but in the bulk of the market.

One of the most memorable bear markets in recent history followed the stock market crash of 1929. In the three years that followed nearly 90% of stock values were wiped out. But obviously things did improve.

The patterns seen in a bear market tend to be a very big initial drop in values, which pushes a lot of the speculators out of the market. This is followed by a temporary period of stock price increases before the market starts to decline again over a longer period.

But bull and bear markets are a cycle and one follows another. The problem is that there is no guarantee when the change will come or how long the patterns will last. It is easy to identify in retrospect, but much harder predicting the future.

For many people the idea that markets have cycle is forgotten. One can make money in both a bear and a bull market. - 23200

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