What is a bull market, commonly referred to as a bull market?
A bull market, known as a “bull market,” refers to a prolonged rise in the stock market price of securities or prices of commodities listed on the stock exchange.
The colloquial name “bull market” comes from the bull’s method of attack, which strikes the horns from the bottom up to symbolize market movements.
Its opposite is a bull market, which is commonly referred to as a bear market.
What does a bull market entail?
This is the moment when many traders decide to buy back shares and increased volume and increased investor activity. This is the so-called good time in the stock market.
When does the bull market begin?
Bull market and bull market cycles have different characters in the stock market. There are periods of high regularity, as well as high irregularity. In most cases, they are irregular, with different frequencies of repeating the same values.
This is a characteristic of economic and stock market cycles. This is a basic assumption, as is the fact that the economy develops from depression, recession to boom and over-investment, with all intermediate phases.
The boom-bust cycle
Like any cycle, it contains its phases. In this case, in the stock market we can observe one by one:
- panic,
- discouragement,
- disbelief,
- indifference,
- growth,
- euphoria,
- saturation.
These phases always occur at different times, in different cycles. It is often said that there is a very long Kondratiev cycle (about 54 years), a 9-year cycle, a Kitchin cycle (3 or 4 years), up to minute cycles.
For most economies, they reach different phases of the boom-bust cycle at different times. Typically, the bull market starts in the dollar to then move to the bond market, stocks, real estate, all the way to the commodities market.
Some phases may overlap with others, but the general regularity is noticeable. There is always a market to make money and benefit from price increases.
Example of Kitchin cycle model – to illustrate the stock market situation
- Phase I: The beginning of the recession – a bull market in bonds, a slump in stocks and natural resources
- Phase II: Deepening of recession – end of bond bull market, end of bull market – due to discouragement in the market; apparent fall in commodity market prices
- Phase III: Beginning of recovery – bond yields fall, bull market in equities; commodity and stock prices rise
- Phase IV: Expansion underway – bull market in bonds, bull market in equities; commodity prices begin to rise
- Phase V: Peak of growth – bonds continue to decline, while stocks peak and begin to slowly decline; strong upward trends in the natural resources market
- Phase VI: The beginning of the recession – the end of the bull market in bonds, stocks and natural resources.
