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?

    First of all, let's remember that bears are sluggish and bulls spirited and burly. The terms are used to describe general ... 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. How do technical analysts predict bull markets?

    Dive into the methods and assumptions of technical analysis, and see how analysts go about trying to predict a bull market ... 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

    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.
  3. Investing

    Adapt To A Bear Market

    Learn how your portfolio should evolve to suit bear market conditions.
  4. 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.
  5. Trading

    Surviving Bear Country

    Stay calm, play dead and keep your eyes open for attractive valuations.
  6. 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.
  7. Financial Advisor

    Preparing Your Clients for the Next Bear Market

    It has been almost six years since the last bear market, so it might be time for advisors to start preparing their clients for the inevitable downturn.
  8. Investing

    5 Signs Of A Pending Bull Market

    Being able to accurately spot the beginning of a bull market can be one of the most lucrative skills around.
  9. Trading

    Identifying Market Trends

    The success or failure of your long- and short-term investing depends on recognizing the direction of the market.
  10. Investing

    A Trader's Look at the S&P 500

    Moving averages are sending an important signal, and it's probably not what you think.
RELATED TERMS
  1. Bull Position

    A long position in a financial security, such as a stock in the ...
  2. Bear Market Rally

    A period in which prices of stocks increase during a bear market. ...
  3. Bear Closing

    Purchasing a security, currency, or commodity in order to close ...
  4. Bear Market

    A market condition in which the prices of securities are falling, ...
  5. Bear Position

    Alternate term for a short position in a financial security. ...
  6. Bear Fund

    A mutual fund designed to provide higher returns when the market ...
Hot Definitions
  1. Price Elasticity Of Demand

    A measure of the relationship between a change in the quantity demanded of a particular good and a change in its price. Price ...
  2. Market Capitalization

    The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying ...
  3. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Down Round

    A round of financing where investors purchase stock from a company at a lower valuation than the valuation placed upon the ...
  6. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
Trading Center