Bull and Bear Markets

These terms are used frequently in the financial world. Basically one means the market is going down (Bear) , the other means the market is going up ( Bull).

Bear Market

A bear market is a market in decline over a long period of time, where the prices of securities are falling. It is defined by a strong feeling of pessimism in investors.

A ‘correction’ in the market is a short-term downward trend, a correction only lasts less than two months.

Bull Market

A bull market is defined as: a market in which prices are rising. A bull market is most often used to refer to the stock market, but a bull market can also be applied to anything that is traded: bonds, currencies or commodities.

Bull markets are defined by optimism, and investor confidence that strong positive results will come. It's always difficult to predict when the trends in the market will change. Part of the difficulty is that human psychological effects and speculation may sometimes plays a deciding role in the market movements. People sell when they are pessimistic and buy when they are optimistic. Human beings control the market and they are difficult to predict.

The terms bull and bear market where created to illustrate the way that the market moves. A bear swipes its arms down when on the attack, while a bull pushes it's horns upwards.