{"id":150714,"date":"2019-07-02T10:22:50","date_gmt":"2019-07-02T14:22:50","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=150714"},"modified":"2019-07-02T07:07:41","modified_gmt":"2019-07-02T11:07:41","slug":"where-bulls-bears-come-from","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/07\/where-bulls-bears-come-from\/","title":{"rendered":"Where \u201cBulls\u201d &#038; \u201cBears\u201d Come From"},"content":{"rendered":"<div id=\"inves-3075434449\" class=\"inves-below-title-posts inves-entity-placement\"><div id =\"posts_date_custom\"><div align=\"left\">July 2, 2019<\/div><hr style=\"border: none; border-bottom: 3px solid black;\">\r\n<\/div><\/div><p><strong>By <\/strong><a href=\"https:\/\/www.orbex.com\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>Orbex<\/strong><\/a><\/p>\n<p><em>\u2018Bull market\u2019<\/em>\u00a0and \u2018<em>bear market\u2019<\/em>\u00a0are terms you probably would have come across at some point. These phrases are widely used in the industry to convey how the markets are performing.<\/p>\n<p>The terms are\u00a0also\u00a0technically used to describe economic conditions, and this is reflected in the markets. The context of the usage of these terms plays an important role. Typically, bull and bear markets are used to denote a specific asset class such as stocks, bonds, real estate or even the economy.<\/p>\n<ul>\n<li>A bull market depicts the environment that is generally optimistic and expanding.<\/li>\n<li>A bear market depicts an environment that is the opposite of the bull market; pessimistic and contracting growth.<\/li>\n<\/ul>\n<p>Thus, when the markets are rising, the markets are said to be a bull market and when the markets are falling, the markets are said to be bear markets.<\/p>\n<p>Generally, when there is a correction of 20% or more from the 52-week high, we tend to refer to this as a bear market, or simply bearish. Depending on who you ask, this can be around 10% \u2013 20% which is an acceptable range.<\/p>\n<p>Similarly, when the markets rise 20% or more from the correction, it is said to be a bull market. Within the bull markets, there is another term called the\u00a0<em>secular bull market.<\/em>\u00a0A secular bull market is one which lasts between 5 \u2013 25 years or more.<\/p><div id=\"inves-3134032031\" class=\"inves-in-content inves-entity-placement\"><hr style=\"border: 1px solid #ddd;\">\r\n<div id=\"inpost_ads_header\">\r\n<p style=\"font-size:10px; float:left; color:#666;\">Free Reports:<\/p><\/div>\r\n<div id=\"inpost_ads\"> \r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/1ApBOV\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2018\/06\/graph_techs_PD.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t     <a href=\"https:\/\/goo.gl\/1ApBOV\"><b><u>Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p><br><br>\r\n<br>\r\n<br>\r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/f3RrHX\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2019\/01\/cot_pie_80.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t    <a href=\"https:\/\/goo.gl\/f3RrHX\"><b><u>Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p><br><br>\r\n<\/div>\r\n<hr style=\"border: 1px solid #ddd;\">\r\n<br><\/div>\n<p>During a secular bull market, it\u2019s common to see the markets correcting at least 10% over the course.<\/p>\n<h2><strong>Origin of the Terms\u00a0<\/strong><\/h2>\n<p>The term bull market is obviously derived from the bull. With its sharp horns that are inclined upward, bulls are known to attack by generally swinging their head upwards.<\/p>\n<p>On the other hand, the term bear market is derived from the bear. A bear generally attacks with its paws, striking down. Another fact about the bears is that they tend to hibernate for prolonged periods of time.<\/p>\n<p>Thus, drawing an analogy from the characteristics of the bull and bear markets, traders generally use these terms to depict whether the markets are going up or down. In other words, it depicts the optimism and sentiment in the markets.<\/p>\n<p>When comparing the bull and bear markets, the bear markets are shorter in nature. Thus, bull markets tend to prevail for much longer. In fact, various studies show that if you look to the S&amp;P500 index over a span of decades, the bull markets outperform the bear markets.<\/p>\n<figure id=\"attachment_85271\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/www.orbex.com\/blog\/wp-content\/uploads\/2019\/06\/SPX500-Chart.png\" target=\"_blank\" rel=\"noopener prettyphoto noreferrer\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-85271 size-full b-loaded\" src=\"https:\/\/www.orbex.com\/blog\/wp-content\/uploads\/2019\/06\/SPX500-Chart.png\" alt=\"SPX500 Chart\" width=\"800\" height=\"400\" \/><\/a><figcaption class=\"wp-caption-text\">SPX500 Chart \u2013 Bull market with intermittent bear market corrections<\/figcaption><\/figure>\n<p>But, of course, we should mention that past performance is no way an indicator of future returns. Generally, bear markets last over a period of 1 or 2 years at best, while bull markets tend to have an average lifespan of 6 years or more.<\/p>\n<h2><strong>Characteristics of Bull &amp; Bear Markets<\/strong><\/h2>\n<p>Both the bull and bear markets have certain characteristics described below.<\/p>\n<table>\n<tbody>\n<tr>\n<td width=\"300\"><strong>Bull Market<\/strong><\/td>\n<td width=\"300\"><strong>Bear Market<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"300\">Investors are optimistic<\/td>\n<td width=\"300\">Investors are pessimistic<\/td>\n<\/tr>\n<tr>\n<td width=\"300\">The economy is expanding<\/td>\n<td width=\"300\">The economy is contracting<\/td>\n<\/tr>\n<tr>\n<td width=\"300\">Asset class returns are positive<\/td>\n<td width=\"300\">Asset class returns are negative<\/td>\n<\/tr>\n<tr>\n<td width=\"300\">More confidence in the markets<\/td>\n<td width=\"300\">Less confidence in the markets<\/td>\n<\/tr>\n<tr>\n<td width=\"300\">Good for the economy<\/td>\n<td width=\"300\">Bad for the economy<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2><strong>Other Terms &amp; Uses<\/strong><\/h2>\n<p>The terms bull and bear markets are also used to depict other features of the markets. For example, in central bank terminology, the equivalent of the bull market is\u00a0<em>hawkish<\/em>, and the equivalent of the bear market is\u00a0<em>dovish<\/em>.<\/p>\n<p>If you look closely, you will find the animal or bird analogy here as well. A dove is usually considered a docile bird, while the hawk sits on top of the food chain. Thus, when central bankers give their speeches or release monetary policy reports, they are either hawkish or dovish.<\/p>\n<p>When a central bank is dovish, it means that the policymakers expect the economy to perform poorly, thus signaling lower\u00a0<a href=\"https:\/\/www.orbex.com\/blog\/en\/2018\/10\/fed-guide-to-how-the-federal-reserve-sets-interest-rates\" target=\"_blank\" rel=\"noopener noreferrer\">interest rates<\/a>\u00a0or loose monetary policy. On the contrary, when a central bank is hawkish, it means that policymakers expect the economy to expand. This, in turn, translates to higher interest rates or tighter monetary policy.<\/p>\n<p>In conclusion, whether it is a bull market or a bearish one, or whether it\u2019s dovish or hawkish, you will find that while the terminology may differ, it all refers to the same\u00a0<a href=\"https:\/\/www.orbex.com\/blog\/en\/2019\/06\/what-you-need-know-about-supply-and-demand\" target=\"_blank\" rel=\"noopener noreferrer\">aspects of the financial markets.<\/a>\u00a0It does sound with animal analogies, though.<\/p>\n<p><strong>By <\/strong><a href=\"https:\/\/www.orbex.com\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>Orbex<\/strong><\/a><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Orbex \u2018Bull market\u2019\u00a0and \u2018bear market\u2019\u00a0are terms you probably would have come across at some point. These phrases are widely used in the industry to convey how the markets are performing. The terms are\u00a0also\u00a0technically used to describe economic conditions, and this is reflected in the markets. The context of the usage of these terms plays [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-150714","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/150714","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=150714"}],"version-history":[{"count":3,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/150714\/revisions"}],"predecessor-version":[{"id":150727,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/150714\/revisions\/150727"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=150714"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=150714"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=150714"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}