We All Love A Bull Market

By Mike Swanson

The terms bull and bear markets are used to describe the general trend of either increasing or decreasing stick prices. Of course stock prices fluctuate during the course of any trading day. The bear and bull market descriptors describe a trend over a longer period. Some analysts suggest the minimum time period is two months and the general price change needs to be plus or minus twenty percent.

A bull market describes a market where prices are generally on the increase. A bull market often starts when market confidence is at its lowest. At this time investor confidence starts to increase and there is an expectation gains will be made on rising stock prices. This is happening now in the gold stocks market.

A bear market on the other hand is one where there is a constant decline in stock prices.

The most famous bear market conditions were post 1929 after the Wall Street crash. In the five years after this stocks lost nearly 90% of their value. They obviously recovered but it was a long road.

Most bear markets work with the pattern where there is a large initial decrease in values which eliminates many of the speculators from the market. Then there may be a short period when prices rise and investors think the worst is over. This is then followed by a period when there is simply a sustained decline.

But with any cycle after the decreases of the bear market come the rises of the bull market. It is well known that to make money on stocks you try to buy low and sell high. However no one knows where a market will head and knowing when to buy or sell is not easy.

The cycle can not be forgotten and people need to be aware of where the market is going and whether analysts consider conditions to be a bull market or a bear market. - 23226

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