Bull Market Definition
A bull market occurs when the market is expected to continue higher over an extended period of time. Bull markets are primarily described when discussing stocks, but it can be related to bonds, commodities, futures, or forex markets. Bull markets occur when the demand for a security or group of securities outweighs the normal laws of supply and demand. This sort of demand pushes prices higher.
Why is it Called a Bull Market?
The term "bull" is used to describe the market, because bulls attack by pushing their horns out and up. Hence the thrusting motion up resembles the upward move of the markets. Also, when bulls run together, they do so without looking back and go full steam ahead. This is also the mentality of the markets as traders and speculators trip over themselves attempting to jump on the band wagon for quick gains.
Characteristics of a Bull Market
A bull market is accompanied with a number of identifiers. Below are some examples:
- High P/E ratios
- Endless news and media coverage of the market
- Marginal retracements after each successive high
Recent Bull Markets
There have been a number of recent bull markets. Most notably has been the rally in the Sensex, where it has run from 7,000 in June of 2005 to over 21,000 in early 2008. Another bull market occurred in the oil markets, where a barrel of oil ran from $60 to over $150 in roughly 18 months.