What Is a Bull Market?
A bull market is a perceived trend of the financial markets to move steadily in a certain direction for extended periods of time. These trends can be categorized into two: secular and primary. Secular trends, also known as the “fundamentals”, tend to last for several years or even decades. In the past, these trends were usually characterized by the stock market moving up for a short period of time then coming back down before ending the upswing.

Primary market trends can last longer, but they usually require a very strong economic backdrop. In addition to being a strong economic backdrop, these trends are usually accompanied by an uptrend in the Dow Jones Index. When these markets come down in a short period of time, they are often said to have hit a “bubble” or a bear market. The opposite is true if the markets fall in a long period of time.

In order to understand what a bull market is, one must first recognize the fundamental indicators that are commonly associated with the current market environment. These indicators have been around for many years. In fact, the Dow Jones was originally defined by The Conference Board, a market research and analysis company, as a daily index based on the following data: the change in the closing price of the Dow Jones Index stocks in the previous two business days and the change in the volume of the shares traded during the same period. These indicators can be used as a guide to determine whether a market is trending upward or downward.

When it comes to recognizing what a bull market is, these trends may not always occur in the same way. For instance, a stock may be considered a strong market in the Dow Jones Index is consistently moving higher each day while the markets on the other hand may be losing money. Another indicator to be aware of when it comes to recognizing market strength is the ratio of trading volume to the overall trading volume. The ratio of trading volume to the overall trading volume shows how well the market is performing compared to its historical average. When a stock market has low ratios of trading volume to the overall trading volume, it can be considered a weaker market while one with high ratios may be considered stronger.

Once the market has been established as a bull market, traders are able to take advantage of a variety of technical and fundamental indicators that are associated with the market. These indicators allow traders to make their decisions based on a multitude of factors. One of the most well-known indicators of strength is the Relative Strength Index. This indicator was created by two analysts at the University of Michigan and can be used as a tool to determine if a stock is being over or undervalued.

The Relative Strength Index is calculated by taking a daily performance ratio of the price of the stock against the current value of the same stock multiplied by a constant factor. This constant factor represents the market value in relation to the previous day’s prices. The higher the number is, the greater is the strength of the market.

Another indicator of strength is the Stochastic Trend Line which compares the price of the stock against the previous day’s price. It is based on the rolling price data and is also a very useful indicator. An example of a well-known trend line would be the Dow Jones Index.

Once the indicators of strength have been determined, traders can use charts to better understand the market. Many charts can be found online that can give traders more insight into market trends. These charts will show you a variety of different types of market data including: the average time frame for a stock to go through, the daily range and average range, the average price, the moving averages, the range between the highs and lows, and any breakout levels or support levels. They are useful tools to help investors understand the market more easily and can help make trading easier and more effective.


  • Gio Watts

    Gio Watts brings over 10 years of digital marketing experience to his role as marketing manager at Walletminded. In his current position, Gio oversees brand marketing, campaign management, and audience growth initiatives. Prior to joining Walletminded, Gio held marketing roles at several ecommerce and SaaS startups, most recently serving as senior marketing manager at CloudTable Inc. There, he specialized in paid social advertising and content marketing. Gio holds a bachelor’s degree in business marketing from the University of Oregon. He is a certified content marketing specialist and frequently guest lectures at his alma mater. When he's not devising omni-channel marketing campaigns, you can find Gio coaching youth basketball and indulging his passion for live music.

Leave a Reply

Your email address will not be published. Required fields are marked *