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Rally

A point in time of continued increases in the prices of stocks, bonds or indices.

This kind of price change can happen in a bull or a bear market, when it is known as either a bull market rally or a bear market rally, respectively.On the other hand, a rally will usually follow a period of flat or decreasing prices.

Breaking Down Rally

A rally is initiated by a huge amount of cash incoming the market, bidding up the prices.

The length of a rally rests on the complexity of buyers alongside with the price of selling pressure they face. Let’s say, if there is a big pool of buyers, but only a small number of investors willing to sell, it is expected to have a big rally. If, on the other hand, the same big pool of buyers is corresponded by a similar amount of sellers, the increase is likely to be short and the price movement will be slight. 

Bull Market

The stock exchange by a group of securities in which prices are increasing or are anticipated to increase. The term "bull market" is frequently used to discuss the stock market, but can be useful to anything that is traded, including bonds, currencies and commodities.

Sucker Rally

Sucker Rally is a short-term increase in a specific stock or the market, in general. It happens with the less fundamental info to back the movement in price.

This increase may continue just long enough for the "suckers" to get on board, afterwards the market or a specific stock falls.

Breaking Down Sucker Rally

A sucker rally is a term that refers to an increase in price that does not reveal the true worth of the stock.

For instance, supposing that two tech companies “X” and “Y” see an increase in stock price due to their strong financial statements, and a separate tech company “Z” sees an increase in stock price. If the actual purpose of the rally turns out to be because of potential acquisitions of X and Y, then Z will have a sucker rally, increasing along with X and Y.

Bear Market

This is the market situation in which the prices of havens are falling, and worldwide doubt causes the negative feeling to be self-supporting.

As shareholders expect damages in a bear market and selling remains, doubt only increases.

Even though statistics can be different, for others, a decline of 20 percent or more in numerous broad market directories, such as the DJIA or Standard & Poor’s 500 Index (S&P 500), more than at least a two-month period, is treated an admission into a bear market. 

Breaking Down Bear Market

A Bear Market should not be mixed up with a correction, as it is a short-term movement that has a period of less than two months. On the other hand, corrections are frequently a good place for a value investor to find an entrance point, bear markets seldom offer great entrance points, as timing the bottom is very hard to do.

Struggling back can be very dangerous since it is somewhat difficult for an investor to make stellar gains throughout a bear market, except if he or she is a short seller.

Bear Market Rally

This is the point in time in which cost of stocks increases during a bear market.

A bear market rally is typically a short-lived market upsurge succeeding a period of marked decrease and is followed by another period of market decline leading to a definite down trend.

Breaking Down Bear Market Rally

Even though there are no official guidelines for a bear market rally, it is sometimes defined as an overall market increase of 10-20 percent during a complete bear market.

There are lots of examples of bear market rallies in current stock market history, including the bear market rally of the Dow Jones, succeeding the stock market crash of 1929, which finally saw a bottoming out in 1932.


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