Bullish or Bearish?

If you're a beginner in the US Stock Market, you may be be confused with some terms frequently used in investors' interviews, news or the papers. So what exactly does bullish and bearish mean?


When the market is said to have a Bullish trend, it means the overall market direction is on the upside. This means investors have an increased confidence in the market and are more willing to top up investments in the market. This is also said to be the best market environment to be buying stocks.


A Bearish trend on the other hand means the market has been on a down trend. Using the rule of the thumb, bearish trends mean stock prices have been declining 20% or more over a two-month period of more. This usually happens during a transition from a period of high investor confidence to normalcy or market uncertainty.


An easy way to remember these terms is to imagine a fight between a bull and a bear. Bulls typically use their horns to attack and so it attacks with an upward movement. Bear use their claws and so it swings it’s paw with downward strokes. Hopefully this helps you remember better.