Bear Market? Bull Market? Bullish or Bearish? What the heck are they talking about?
OK, remember this is remedial trading. This is the stuff that nobody tells us about. They assume we know. Well, how are we supposed to know unless somebody explains it? From the mouth of a new trader, here is a beginning explanation for you.
Bear Market or Bull Market refers to the overall stock Market and the trend that it is following. If the overall Market is going down, this is called a Bear Market. In general this means that the Dow and the Nasdaq, among others, had more losing trades than gaining trades and their numbers went down. We'll hear something like "The Nasdaq lost 200 points today or, The Dow closed below 12000 today, below its 50 day moving average. This is an indication of a potential Bear Market. If the trend continues in that direction for a period of time, it will become a Bear Market. One day does not determine a Bear Market or a Bull Market in one day.
As for a Bull Market, yes, you figured it out. If the overall Market is going up you're going to hear things like "The Dow was up 50 points today or the Nasdaq winners outnumbered losers by .02 %." This is a potential Bull Market. If the trend continues up then it will be considered a Bull Market.
Now, the additional elementary information for us newbies is that we can be "Bullish" on a particular stock by believing that it will go up, even if the overall Market is Bearish. An example of this would be an investment in oil. When the overall stock Market is really suffering because of the high cost of resources (like oil), if you have investments in oil you could be making a fortune. Therefore, you are Bullish on oil even though the overall Market is a Bear Market.
To be Bearish on a stock will only be beneficial if you have some type of investment that profits from that stock losing value. This concept is a bit more complicated and goes beyond basic buying of stock. At some point we will talk about this further because there are many ways to profit off of being Bearish on a stock but that's not in our remedial lesson today.
And finally, there is also a sideways Market. This means that the overall Market is moving within a range that is not enough up or down to be considered Bear or Bull.
Why did somebody choose the terms Bear and Bull? I'll have to look into that some more. In the meantime, suffice to say that's just the way it is!
Support and Resistance? I'll talk about those terms soon. Thanks for dropping by.
Chris Best started trading in 2005. She has learned a lot in a short period of time. Chris has traded stocks, options, and futures. She has day traded, swing traded, and traded long term. She has traded penny stocks, small cap stocks, and mid-priced stocks (No Google!) She has traded all kinds of options, spreads, and LEAPS. She knows about margin, stops, limit orders, etc. Chris hosts a site http://www.HelpingWomenTrade.com that offers information for newbie traders. There is a lot to learn. Chris has an M.A. in Communications, business and personal training certification, and has written numerous articles and 2 books.
Reuters - G20 leaders convinced investors they were united enough to keep a risk-taking rally alive on Friday, lifting Asian stocks a fourth day, but the U.S. dollar fought back from early losses ahead of the latest U.S. payrolls number due later in the day.
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