Bull Market / Bear Market
A phase where prices broadly rise is a bull market, where they fall is a bear market — a roughly 20% drop from the peak is the usual bear-market threshold.
In plain terms
A bull market is when the stock market broadly rises; a bear market is when it broadly falls. The names come from a bull thrusting its horns up and a bear swiping its paws down.
Usually, when a leading index (the S&P 500 in the US) falls more than 20% from its peak, it is said to have entered a bear market. A roughly 10% drop short of that is separately called a "correction."
What it tells you
Bull and bear markets tell you "the mood of the whole market" beyond individual stocks. In a bear market even good companies' stocks get dragged down, and in a bull market even ordinary companies ride the mood up.
So when viewing a stock's price flow, it matters to tell whether it is just that company or it got swept up in the whole-market flow.
Formula
bear market = a phase down about 20% or more from the peak bull market = a phase recovering from a low and broadly rising
What high or low means
A bear market, where even good companies get cheap amid fear, can be an occasion for long-term investors to examine stocks of interest. A bull market tends to raise valuations (PER, etc.) as optimism grows.
But "is it a bull or bear market now" often becomes clear only in hindsight, so it is hard to call in real time.
The simple formula "bear market = always time to sell, bull market = always time to buy" is dangerous. Trying to call the whole market's direction (market timing) is something even experts get wrong often. It is safer to view market phases as "a backdrop for understanding the mood."
Even in a bear market, not all sectors fall the same. Less cyclical consumer staples and utilities sometimes fall relatively less.
Bull and bear markets are about index flows. This term is background for understanding market news. (※ Our screen handles individual companies' SEC-filed financials and does not provide market indices themselves.)
Metrics to read alongside
See it in real stocks
Search US stocks on Stocklore to see Bull and other financial metrics alongside the sector average.
This explanation is for information and reference only and is not a recommendation to buy or sell any security. Investment decisions and their consequences are your own.