Secrets To Bull Markets

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.

A bear market on the other hand is a trend in a downward direction. The entire market goes down, not just an individual stock.

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.

There is a recognised pattern to bear markets that a large initial decline is followed by a short term temporary correction in prices. Many investors trade at this time an are burnt when the next wave happens and there is a sustained decrease in stock prices.

But after bear market comes a bull market. In a bull market there tends to be higher levels of trading. The key to making money is to buy a stock at lower price and sell it as it rises. But no one has a crystal ball and doing so is easier said than done.

For many people the idea that markets have cycle is forgotten. One can make money in both a bear and a bull market. - 23199

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