Apparently ”bull market” is an ambiguous term
- Thread starter Maverick2608
- Start date
For a trader knowing the definition of "bull/bear" market is irrelevant... abiguous or not. You make money by being on the right side of market price (and lose for being on the wrong side).
Most pros define it with a 200 day moving average; with discretion
A bear move /bear market can be 20% down; when SPY went down about 20% several years ago, S&P 500 equal weight went down about 25%.Some said well, not a bear it was only about 19+% down LOL. OK then;it was a bear in S&P 500 equal weight.LOL.
A bear move /bear market can be 20% down; when SPY went down about 20% several years ago, S&P 500 equal weight went down about 25%.Some said well, not a bear it was only about 19+% down LOL. OK then;it was a bear in S&P 500 equal weight.LOL.
The notion that "-20% down is a bear market" is total nonsense.
Years ago, a -25% dip was considered just "noise".
A bear market is about 2 things....
1. Price pattern of lower highs and lower lows
2. Time.... relentless downside psychology, day after day, month after month... so that "negativism, despair, and fear it's going a lot lower and will never recover" sets in.
One way to assess "bearish psychology" is that (1) price is well below the 50 and 200 day moving averages, and (2) the slope of those averages is down.
Years ago, a -25% dip was considered just "noise".
A bear market is about 2 things....
1. Price pattern of lower highs and lower lows
2. Time.... relentless downside psychology, day after day, month after month... so that "negativism, despair, and fear it's going a lot lower and will never recover" sets in.
One way to assess "bearish psychology" is that (1) price is well below the 50 and 200 day moving averages, and (2) the slope of those averages is down.
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Thanks for you comment;
IBD is not known for nonsense.LOL You may want to take it up them.25% = noise?? LOL I see your points however.
Study historical price. Used to be the market would advance in an up channel with -25% dips as "noise", not changing the overall channel up-trend. Those dips did not have the "negative time and psychological despair" characteristics of bear markets... but rather uncomortable short-term drawdowns.
If IBD wants to redefine "bear market" based upon price alone, I disagree.
The reason this concept is important today is that investors/traders get caught up in the semantics of the definition of "bear market".
It doesn't pay to get bearish FOR ANY REASON UNTIL THE MARKET ACTUALLY DOES SOMETHING BEARISH. IMV... it would take a minimum of the market closing below AND MAINTAINING prices below the lows of February.
Of course, there will be those who try to "nail the top" for the beginning of a bear market (including me), but best not be too cocky in the read of that... and be using tight stops. Rewards could be great if you get it, but odds against being correct in any try of that play are significant.
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Well that made more sense than calling '' -25% noise LOL . Feel free to start your own newspaper.And another big problem with calling --25% noise ; requires 50% gain to get even.Its like the MS manager[ about $77 billion AUM] in 2018 WSJ newspaper said ;trends last longer than anyone thinks....................................................................................NOT a prediction.
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Well that made more sense than calling '' -25% noise LOL . Feel free to start your own newspaper.And another big problem with calling --25% noise ; requires 50% gain to get even.Its like the MS manager[ about $77 billion AUM] in 2018 WSJ newspaper said ;trends last longer than anyone thinks....................................................................................NOT a prediction.
If a move doesn't change the trend direction, it's just "noise".
That's a lot different from today where a dip of 3 days brings out cries of "where's the Fed? Where's the PPT to stop the decline"?
It's all "intervention and manipulation" whereas years ago the markets were about "value and price discovery".
There's another current ET thread about "do markets change"? Of course they do. Years ago, they were all about the retail investor. Then, institutional dominance. Now it's HFT, the PPT and Fed intervention. Sure, they change.... but knowing that doesn't do any of us retail screen jockeys any good.
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33% actually.
...If a move doesn't change the trend direction, it's just "noise"...
You'd have to define a trend, and over what time frame that "trend" takes place. Since every broad index inception, the trend has been up. There have just been pullbacks to various degrees of intensity. There have been some good charts posted on the forum recently of the bull v. bear market overview. Is a 1 year bear market down trend more of a trend than a 10 year bull market up trend? The only thing I can think of in my limited experience that was a permanent down trend was the XIV implosion to zero in the beginning of the year. Other than that, everything that thinks long, wins in the long term. So the "trend" is always up with temporary pullbacks.