Bull and Bear market is used to tell that how stock market working in general.
A bull market is the state of a financial market, of a group of securities in which prices are rising or are expected to rise. The word “bull market” is used to refer to the stock market. It can be applied to any product that is exported or imported. It usually includes bonds, property, cash and supplies. Because prices of securities rise and fall continuously during trading, the word “bull market” is kept for extended periods in which a large portion of security prices are rising. Bull markets tend to end for months or even years.A bull market is usually active when everything in the economy is running well. The people are finding jobs. When the unemployment rate is very low. When the economy is growing. And it can be measured accuratelyby gross domestic product (GDP). Bull market is active when stocks are rising. Selecting stocks during a bull market is quiet easy. This is because, everything in the market is going up. If a person is positive and trusts that stocks will definitely go up, then he or she is called a bull. It is called bullish viewpoint. Bull markets cannot end forever. They can bring you to dangerous situations, this will usually happen if stocks become overvalued.
A bear market is a state in which securities prices fall 20 percent or more from recent highs within widespread doubt and negative investor sentiment.Bear markets are related with declines in an overall market or index like the S&P 500, but individual securities or supplies can be considered to be in a bear market if they experience a decline of 20 percent or more over a constant period of time, usually two months or more.During bear markets, prices do not usually drop in a systematic way to some important level of price-to-earnings. The market participants often overreact in anxiety and they usually in tension send prices below reasonable estimates. When there will be tension, there will be fear. Sillybehaviour can spread in the markets and markets can fall.
Market sentiment is the attitude of investors toward a certain security or financial market. Market sentiment is the feeling of a market. It can be its crowd psychology. It is, as revealed through the activity and price movement of the securities traded in that market. Rising prices would tell bullish market sentiment. Falling prices would tell bearish market sentiment.When there is tension, there is fear. Foolishbehaviour can spread in the market, and markets can break. Hopes about future cash flows usually drop to zero. People become more worried with converting investments into cash than future growth of their market. Only when balanced investing behaviour is returned. Itdoes a bear market turn its position. It is also important considering out that bear markets can be great opportunities for long-term investors in order to buy stocks “on sale” at comparatively low prices. It can considerably boost overall returns over long time views.