A:

A bull market is represented by a rising price trend, and a bear market is indicated by a falling price trend. Given this simple definition, you might think it would be easy to determine what type of market we're in at any point in time. However, it's not as easy as it sounds because it all depends on what time frame you choose when determining where one kind of market ends and another begins.

For example, say the market has been up for the past two years; you could then argue that we are still in the midst of a bull market. However, if the most recent three months were negative, you could argue instead that we've already hit the top and are actually in a new bear market. The first argument arises from looking at the past two years and the second argument arises from looking at the last three months - which one is right?

There is no perfect way to label a bull or bear market. It is easier to look back on previous time frames and clearly describe whether they are positive or negative by looking at the past peaks and bottoms - because the present market isn't as clear. So, because the answer to this question depends on whom you ask and what time frame you give, we can't say that there is ever a "correct" answer to this question. (For more information, see Digging Deeper Into Bull And Bear Markets.)

The easier answer is to identify bulls and bears in your individual stocks. To do so, check out Track Stock Prices With Trendlines.

RELATED FAQS
  1. Where Did the Bull and Bear Market Get Their Names?

    The terms bull and bear are used to describe general actions and attitudes, or sentiment, either of an individual (bear and ... Read Answer >>
  2. What are the signs of a bear market rally?

    Read about some of the signs of a bear market rally, an unpredictable bull movement that takes place in the middle of a stronger ... Read Answer >>
  3. What is a common strategy traders implement when using the Elder-Ray Index?

    Read about the important buying and selling conditions that are recommended by Dr. Alexander Elder when using his Elder-Ray ... Read Answer >>
  4. What are common investing mistakes in bear markets?

    Learn why investing in a tumultuous market can be challenging even for the most experienced investors. Avoiding these common ... Read Answer >>
Related Articles
  1. Insights

    Digging Deeper Into Bull And Bear Markets

    Discover why it's important to know the characteristics of the two types of market conditions.
  2. Investing

    What Does the Bull Market Anniversary Mean to You?

    Bull and bear markets shouldn't really matter to long-term investors.
  3. Investing

    How To Adjust Your Portfolio In A Bear Or Bull Market

    While investors shouldn’t feel compelled to change their portfolios radically overnight in reaction to the market's daily moves, small adjustments in the face of a bull or bear market could be ...
  4. Insights

    How Bull Markets Past and Present Stack Up

    Looking back at the history of bull markets can give some context on where we currently stand.
  5. Trading

    Triple Screen Trading System - Part 4

    How can a trader use the Elder-Ray oscillator as the second screen of this system? Find out here.
  6. Trading

    The Elder-Ray Indicator: Seeing Into The Market

    Elder-ray helps determine the strength of competing groups of bulls and bears so you know when to buy and when to short.
  7. Investing

    Prospering In The Next Bear Market: Here's How

    Prepare to survive, and even prosper, in the impending bear market, by considering and putting into action the following four strategies.
  8. Trading

    Profiting In Bear And Bull Markets

    There are many ways to profit in both bear and bull markets. The key to success is using the tools for each market to their full advantage.
  9. Investing

    Why Timing the Stock Market Is a Bad Idea

    When a market top looks inevitable how should investors proceed?
RELATED TERMS
  1. Bull Market

    A financial market of a group of securities in which prices are ...
  2. Bull Position

    A long position in a financial security, such as a stock in the ...
  3. Bull

    An investor who thinks the market, a specific security or an ...
  4. Gold Bull

    A slang term for a market or investor who is bullish on gold. ...
  5. Bear Market Rally

    A period in which prices of stocks increase during a bear market. ...
  6. Trending Market

    A market that is trending in one direction or another. A bull ...
Hot Definitions
  1. Free Rider Problem

    1. In economics, the free rider problem refers to a situation where some individuals in a population either consume more ...
  2. Dumping

    In international trade, the export by a country or company of a product at a price that is lower in the foreign market than ...
  3. Tender Offer

    An offer to purchase some or all of shareholders' shares in a corporation. The price offered is usually at a premium to the ...
  4. Ponzi Scheme

    A fraudulent investing scam promising high rates of return with little risk to investors. The Ponzi scheme generates returns ...
  5. Dow Jones Industrial Average - DJIA

    The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange ...
  6. Revolving Credit

    A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is ...
Trading Center