What is the stock market of Bullish and bears?

What is the stock market of bulls and bears?

In the stock market, some days we face an upward trend and some other days we face a downward trend. If we draw market statistics on a chart, it looks like a sine chart, now they may have different rates. The term cow and bear refers to a market in which conditions are moving in opposite directions, and for this reason the war between bears and wild cows is famous.

In the stock market, there are certain terms for the upward and downward trend that it is necessary for the actors in this market to know.

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What is a Bullish Market?

Bullish market is a market that has an upward trend. There is no exact reason for this naming, but it can be said that because cows keep their horns high during the war, markets with an uptrend are also called cow markets.

As we have said, we are facing a rising rate in the beef markets. This means that prices have risen as demand has risen, but at the same time supply has fallen, as if as investors rise, investors expect more profit and are not willing. Lose a stock that is profitable.

Most beef markets occur in calm conditions and as a result of good political and economic conditions. Consider the fact that the wheels of factories turn well, as a result of the beneficial activities of factories, the profitability of their stocks increases, demand increases, and as supply rises in price per share, supply also decreases. As mentioned, few people are willing to lose valuable stocks.

What is a bear market?

The term bear market is said to be used when some bear skin dealers, known as “bears” , sell the skins at the current price in anticipation of future prices that are likely to decline, and when prices fall, they make less money. The main sellers were paying.

This is what happens in the stock market, which is referred to as the bear market, meaning that the market rate is falling and prices are falling, and this usually happens as a result of the recession. Of course, any rise in stock prices does not mean economic power, but it may be false.

As for the bear markets, it should be said that contrary to the conditions we face in the Bullish market, ie high demand and low supply, here the demand is low and supply is high, prices have decreased but there is no room in the market to buy. The bear market is a situation in which the stock market has collapsed and investors have suffered losses.

In the bear market, the value of stocks decreases as a result of the decisions and behavior of investors. In other words, in a real bear market where a decline in value of 20% or more occurs and the value of stocks decreases and commodity prices rise and economic conditions in general become volatile and unstable.

In addition, the situation is such that most investors are confident that it will continue. As a result of the recession, redundancies, layoffs and rising unemployment are occurring.

some notes

A bull market is a market that has a rising rate and a bear market is a market that has a falling rate.
Although the stock of some investors may be bearish and others bullish, do not forget that stock market conditions and the rise and fall of stock prices in the long run. That is not to say that this week is a bear market or a bull market. The stock market has typically had an upward trend over a long period of time.
The investment situation during the bear market is more dangerous and worrying than ever; Because, as a result of the recession, commodities have lost their value and prices are not stable.
One of the consequences of the bear market is that when people sell their stocks and liquidity increases, this will continue until the market situation improves.

Features of bear and cow markets

Supply and Demand

The up and down trend in the stock market is affected by supply and demand, so that with increasing demand and favorable economic conditions in the so-called Bullish market, demand is high and supply is low, but in the bear market the situation is quite the opposite. Low demand and high supply are followed by a decrease in stock value due to high supply.

Investor Psychology

Investors ‘perceptions of the situation and their reaction directly affect market conditions, so that investors’ behavior causes the market trend to rise or fall.

But every change and action in the market also affects the behavior of shareholders, in other words, the influence between the market and shareholders is mutual. In the bull market, investors are looking to make more profit by buying stocks.

With the bear market in place, investors are withdrawing their capital from the stock market and investing in fixed-income securities, despite waiting for something positive to happen in the market. Like banks that experience much less risk than the stock market.

In addition, lower prices in market prices undermine investors’ confidence in the stock market and cause people to sell their stocks as far as they can and exit the stock market. As a result of the outflow of money from the market, prices are constantly rising.

Changes in the process of economic activity

Since all the businesses in the stock market are members of a larger economic complex, the slightest change in the economic activities of the subsidiaries affects the larger complex.

In the bear market, economic conditions are severely weakened; Because consumers are not able to buy and do not spend much, most businesses will not be able to make big profits. Other consequences include a direct devaluation of market shares.

In the beef market, the situation is reversed. In addition to the desire to buy, people have good purchasing power, and as a result, the economy gains strength.

How to estimate the trend of market changes?

A long period of time is the key to determining whether a market is bullish or bearish, just because a large number of stocks have been sold in a week and many have withdrawn money does not mean that the market is bearish.

Events that occur over a short period of time indicate a correction or process that took place at that time. Now it is possible to judge the market conditions whether the market is a bull or a bear only in the long run.

However, not everything can be considered the result or factor of the market being a cow or a bear. The country may have been in recession and is now recovering.

Note:

Determining the time for Bullish or bear markets is almost impossible.

What is better to do in any market?

In a Bullish market situation, one should hurry as much as possible and buy valuable stocks. You should take advantage of rising prices and sell stocks as much as possible when the price peaks. At a time when the market is bullish, losses should be avoided and considered temporary, any investor can invest in any part of the stock market and receive multiple gains.

In bear markets, the losses will be much more serious and will have higher rates, because the value of stocks is constantly declining and it is not clear how long this downward trend will continue.

Even if you buy a stock in the hope of gaining a foothold in this situation, you can be sure that you will suffer a loss before you make a profit. Profits will be more limited to short-term investments or fixed-income investments, such as bank deposits.

Some shareholders may also turn to defensive stocks whose performance is only affected by changes in market trends. Therefore, it can be said that defensive stocks are stable both in times of economic darkness and in times of high economic times. These stocks usually belong to government-owned utility industries, which often buy them regardless of the economic conditions of the people.

The interesting thing here is about the profits that some investors may make during the bear market. There are several ways to make a profit, including buying and selling stocks fast, buying EFT’s, or buying stocks that sell at a lower price than before.

last word

Both market conditions, Bullish and bears, affect your investment process. It is better to evaluate the market conditions well before investing and do a study on the market records. It should be noted that the market trend in the long run has always been upward.