What are Bull and Bear markets and how do I conclude that?


Bull Market

A bull market is when the market appears to be in a long-term climb. Bull markets tend to develop when the economy is strong, the unemployment rate is low, and inflation is under control. The emotional and psychological state of investors also affects the market. For example, if investors have faith that the upward trend in stock prices will continue, they are likely to buy more stocks. If there are more buyers interested in buying shares at a given price than there are sellers who are willing to part with their shares at that price, stock prices will continue to rise.

Bear Market

A bear market describes a market that appears to be in a long-term decline. Bear markets tend to develop when the economy enters a recession, unemployment is high, and inflation is rising. Investors lose faith in the market as a whole, which in turn decreases the demand for stocks. Keep in mind that a sustained bear market is something that you should expect to occur from time to time, and that, in the past, the stock market has risen more than it has declined.


Theoretically, bullish trend means 'a series of higher lows and higher highs'. Bearish trend means 'a series of lower highs and lower lows'. Joining these points will give the trend line.

Two things to this: 1. Bear/ Bull trend can be determined w.r.t. a reference point on a chart. 

2. A traders view on the market may vary based on the time frame he is looking at.

Price action is not a straight line one, it is always is in a zig zag form. This happens because of profit booking. A major bullish trend may have minor bearish trends integrated in it and vice versa. 

Also it is possible that minor trend in a higher time frame may look like a major trend in a lower time frame. Its a brief description though, i know i have not made it very clear!.

Shasin, if your answer is based on reference from a different site, please cite the URL of the site here.

How do I conclude it’s a Bull or a Bear market Sir…?

Technically… if market correct more than 20% from its highs… and trade below that for 1-2 weeks… it confirms bear market trend…