Bull Market.

When the stock market is referred to as a bull, it means, in general, that most publicly traded stocks are aggressively on the rise. Many investors gained tremendous profits in the stock market over several years prior to the sub-prime mortgage crisis affecting the whole world since mid-2007.

Over the long-term, repeated bull markets keep the value of the stock markets moving up.

Market Correction.

A market correction occurs when many stocks have been over-bought pushing the prices per share higher than the current demand of the investors purchasing. An unrealistic increase in prices in certain sectors can be referred to as a “bubble” ready to burst. Investors begin to sell and the correction continues to the degree the market (investors buying and selling) is happy with the new price range for the time being. New prices may begin to rise much higher or lower depending on many market factors.

For example, in early 2009 more fears about certain banks in the U.S.A, and Europe kept pushing the financial markets (the financial sector) down.

Bear Market.

Conversely, a bear market refers to a temporary, short-term period when securities decline in value.

Various sectors of the stock market rise and experience a bullish period either in unison, or at differing times. For example, there could be a raging bull market in gold or agriculture stocks while financial stocks are declining or vice versa.

Geographically, there could be a bull market rallying in Germany while there is a bearish market in Japan. However, with the sub-prime crisis, all the world markets have been affected together. Principally the US markets are influencing all world markets in near-unison. Moreover many of the worlds’ financial institutions have been hurt by mortgage debt originating in the U.S.A.

Successful investors achieve tremendous profits in bull markets. These same investors can optimize their trading to work well buying and trading stocks in a bear market. During the bear market they can purchase more stocks or investment fund units for the same money. They view the bear market decline as an opportunity to invest at a bargain.

Market Rally.

A market rally normally occurs over a short period of time from one to seven days, while the market gets quite bullish. This can occur due to good news in the media or a presidential speech. Anything and everything can affect the markets when it is sensitive to good news.When this period lasts longer, it may be a sign that we are entering a new bull market period. Many people ask, “how long will the down-trend last” during a bear market such as witnessed in 2008 and 2009. Often this has to do with Media, and many financial and economic indicators.