Bulls And Bears

Understanding stock market trends can make your job of
earning money in the market much simpler. In contrast, if
you know little or nothing about these trends can cause
serious loss.

Bulls And Bears
As you dig deeper into the market and learn more about the
way it functions, you will begin to hear certain terms about
marketing trends that seem to be repeated over and over
again. Market trends are variable and volatile, both on a
daily basis and over extended periods of time. In the past,
for example, the United States has had devastating stock
market crashes, but due to the freedom of a capitalist
society, the American economy has always eventually
rebound.
What does it mean for the market or a particular stock to
rebound? Assuming that the value of a company or its stock
has plummeted to a level that seem unrecoverable, leaving
it practically worthless, it may feel as though that company
is in danger of bankruptcy and falling off the scope of the
free trade markets altogether. All of a sudden, however, the
founder of that company may introduce a new product over
which consumers go wild. Everyone wants one, and this

product may be in short supply upon its introduction,
causing a race to the department store shelves.
When such a move occurs, the law of supply and demand
will take over, making the company valuable once again.
The stock price for that company’s shares will recover, and
the resulting gain in value would be considered a rebound –
a return to the original status (or better) prior to the
devastating loss.
The market trends either up or down, and there are specific
references to strong changes in the market values that you
may frequently hear. If several different areas of the
market are in a steep downward slide, with values dropping
rapidly (perhaps even ten or twenty percent in a few days),
it is referred to as a bear market. You can remember this
reference as though you are in the extremely dangerous
position of being chased by a bear – if you are in possession
of several stocks or other commodities worth a goodly sum,
you have a serious chance of losing a great deal of value
that could translate to a loss of net worth should you choose
to sell, and it can be a similar, very dangerous situation.
Your best bet in these cases is to either sell before prices
drop below your original purchase price or to hold onto the
shares until the market rebounds. However, when the bear
market reaches a low point, it can be an ideal time to get
into the game, as it is rare for prices to drop below this

point. Then, if you patiently await the recovery or rebound
of the market, you can make a great deal of money from a
bear market. These options will be discussed in more depth
in later chapters.
At the same time, a bull market is a strong general upward
trend for many stocks. You might compare this to the
running of the bulls in Pamplona, Spain, every year. You are
safer if you are indoors when the running occurs, and by the
same token, if you own stock during a bull market, you are
in a prime position to increase your net worth and sell your
shares, making a great deal of money. This is another idea
will be further explored in greater detail further on in this
ebook.