bull market bear market or what's a bear market & bull market
What is a bear market?
A Bull market is that picky financial market where prices are not stable but are constantly rising. It is mainly a merger of securities and prices which are chiefly likely to showcase an upward trend.
When someone talks about the bull market, they are chiefly referring to the stock market. However, any tradable entities such as currency, commodity, bond, etc. are also treated to be a part of a Bull market.
The Bear Market downtrend occurs when the price moves lower low. While the price may move partial higher but not break higher high, downtrends are characterized by lower peaks and lower troughs over time.
Downtrend: Series of lower lows and lower highs
We can look at the chart which depicts downtrend. There are two things which influence the price movement. Prices make high, but the previous high has not yet been met and turn back to break lower low again and again with prices falling down (when a high is the same as a previous high and when a low is the same as a previous low)
What is a Bull market?
In this kind of market, investor self-belief is very high and for this reason, people believe that prices will go on a raise. In this kind of market, the environment of optimism prevails and there are strong prospects that prices will keep rising up and the market will show a good trend. Moreover, it is not that easy to predict the nature of trends in the market.
Speculation plays a superior role here as it is mainly based on positive sentiment and there are no set rules when evaluated to other markets.
Among people who are investing in the market, a number of psychological games can also be played and manipulations can be more.
From the nature of the animal Bull, the name has been derived as bull market. It is pointed out as an upward trend, as the bull always takes the attacking position by pointing its horns up in the air.
However, when a bear faces an attacker, a bear puts its paws downand there is a bear market which is used to indicate a downward trend in the share market.
Example: Bull Market series of higher highs and higher lows
You can notice in the illustration above, Crude oil prices move in a upside rally while taking first high as initial trend , further it indicates same direction making higher high and higher low multiple times which depicts a bull market trend .
What is the indication of Strong Economy?
In a Bull market, there is always a very good demand for securities. Moreover the supply is quiet weak and this means that a greater part of the investors are eager to buy the equity shares while only very little number of them wants to sell. The prices of shares are on an upward trend and investors compete in the stock exchanges such as the National Stock Exchange.
Thus, comprehensible, the prices of shares see an upward trend and investors compete in the stock exchangesas the National Stock Exchange.
Bull market is typically linked with a strong economy as people have a considerable amount of money to invest.