Bull Market Magic

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.

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.

Probably the most well known bear market was the decline after the 1929 stock market crash. Following this 90% of share values were wiped in less than five years.

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. - 23159

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