The markets are constantly moving in different directions. They are driven by a number of factors, one of which is investor sentiment. There are terms associated with these sentiments, such as a Bull market or bullish market and bear market or bearish market. The stock market moves in cycles, which has four phases. If you are investing in the stock market today, you should be aware of which phase the market is in. The timing is important for investors trading stocks, or who are looking for stock picks.
The term bullish market means that the bulls are in control of the market. A bull market occurs when investors are optimistic that markets will continue to perform with strong positive results. During a bull market investors, will step in and start buying. They will push prices up, and as prices rise, the optimism and expectations that the rising markets will continue upward leads to an almost euphoric mood. Investors will start stock picking and look for stock tips on what could give a good return. In the 1990s, there was a bull market in the US that continued up till the Dot com bubble. Bull markets can occur for a short or long term.
Sometimes a bullish market can occur before there are any obvious signs that an economy has recovered. Because it is the best time to buy at the beginning of a bull market, many traders and investors use technical analysis to try to find where a bull market may occur. By using stock charts, and looking at the past and present trends, they seek to identify points where the market may reverse its direction. There are various techniques that are used, from chart analysis to trend lines, and many different theories like the Dow Theory or Elliot wave theory to name a few.
These techniques do not offer a fool proof way to determine how the markets will play out. However, they can greatly increase the chances of finding the area that a reversal will occur. If you are looking to enter the market, then you should watch for a bullish market and see how the investors view the state of the markets. Other signals you can look for that could create a bull market would be an end to political or social unrest, or positive results that indicate an economy is growing.