Stock Market Trends

Stock Market Trends generally pertain to either the upward or downward movement of prices or rates of stocks in the Stock Market. These Stock Market Trends are keenly followed by people associated with the Stock Market to detect the opportune moments for investment and trading, financial gains being the main motive.

Three basic divisions may be made to have a better understanding of the Stock Market Trends:

Primary Stock Market Trends

Secondary Stock Market Trends

Secular Stock Market Trends

Primary Stock Market Trends are further classified into:

Bull Market – connected with rising investor confidence, this kind of a Stock Market incites investors to buy financial instruments especially stocks and shares in anticipation of more and higher financial gains

Bear Market – anticipating further losses in a Stock Market which has undergone a price reduction of 20 percent or more in the Stock Market Index immediately following a prolonged peak period spread over at least two months , most investors sell off

Secondary Stock Market Trends are temporary and smaller fluctuations in Stock Market prices that may last from a few weeks to a few months, taking place within periods of Primary Stock Market Trends. Secondary Stock Market Trends can be segregated into the following:

Correction – basically effected by major calamities or adverse geopolitical events, this refers to a fall of minimum 10 percent in the Stock Market Index which however should not exceed 20 percent

Bear Market Rally – in contrast to the Correction, this refers to modest hikes in the prices of stocks that remain limited within a 10 to 20 percent rise

Secular Stock Market Trends or Super Cycles are rather prolonged periods (which may last from 5 to 25 years at a stretch) of Stock Market Trends which include periods of successive Primary Stock Market Trends. These Stock Market Trends are classified as:

Secular Bull Market – long Bull Markets encompassing smaller intermittent Bear Markets that are not effective enough to reduce the benefits of the preceding Bull Markets, and the succeeding Bull Markets compensates for the losses incurred in the Bear Markets.

Secular Bear Market – characterized by smaller Bull Markets which cannot cancel out the losses suffered during prolonged and larger Bear Markets.

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