HomeHome SearchSearch MenuMenu Our productsOur products

Use this technique to spot a bear market

by , 02 February 2015

As an investor, you want the market in a sustained upward trend (a bull market).

But there are periods when the stock market enters a bear market - the price of stocks starts to trend downwards.

So how can you tell if a bear market has arrived?

Read on to find out…

The best indicator of a bear market

The best indicator of the arrival of a bear market is seeing lower highs and lower lows.

When you look at long-term stock market trends, you’ll notice that it doesn’t move in a straight line.

Characteristics of a bull market

During a bull market, the market takes a series of steps higher along with a few steps lower. Over time, the moves upwards are larger than the steps downwards. This leads to price rises over time.

Have a look at the chart below of a typical bull market…

Chart of a bull market

Characteristics of a bear market

A bear market works in the opposite way to a bull market, Brian Hunt and Ben Morris in Daily Wealth explains.

The market tends to take a few steps lower, then moves a little bit higher. Over time, the moves downwards are larger than the steps upwards. This leads to losses over time.

Have a look at the chart below of a typical bear market…

Chart of a bear market

If you think a bear market is around the corner, you need to watch for lower highs and lower lows appearing in the stock market.

If you see or suspect this in on the cards, you need to be cautious and make sure you have an exit strategy in place. An exit strategy could include using trailing stop losses on your positions in the market.

So there you have it, a technique to spot a bear market.

*********** Advertisement ************

Discover the ONLY way to make LIFE-CHANGING amounts of money on the stock market...

You could be banking some serious profits within a few months... even weeks... (and sometimes even overnight!)

All thanks to the explosive profit potential of a specific class of wealth-creating companies that your friends and neighbours will most probably know nothing about.

But today you can discover everything you need to know to start making gains as big as 200%, 300% and even 500% from these often neglected shares.

Click here to find out more.


Use this technique to spot a bear market
Rate this article    
Note: 5 of 1 vote

Related articles

Related articles

Trending Topics