Key Indications
-All news is bad
-Based on anticipation
-Public absent from the market
-Market may ignore bad news
-Thought to be a bear market rally
-disbelief turns to fear of missing out
-Fundamental undervaluation
Bull market phase 2: IMPROVING EARNING
Key Indications
-Earning increase emerge
-Good news announced
-Employment pick up
-Longest and safest phase
-New companies floated
-Significant corrections end higher
-Fundamental values normal
-Sector rotation
Bull market phase 3: RAMPANT SPECULATION
Key Indications
-Significant fundamental over valuation
-Interest rates relatively high
-Increased price Volatility
-Many new floats and capital raising
-Public enter the market, also day traders
-Media coverage and interest increases
-Market regulation relaxed
-New Paradigm theories advanced
-Market driven by few stocks
Bear Market Phase1: ABANDONMENT OF HOPES
Key Indications
-Fundamental valuations will still high
-Interest rates peak
-The economy is still strong
-Public see a buying opportunity
-Volume falls; buying is done
-Market may ignore good news
-There may be some shock news
-The public may also panic, triggering crash
-Floats fail and then abandoned
- Bear Market Phas2: ABANDONMENT OF HOPES
Key Indications
-Earning decreases announced
-Market ignores good news
-Former market leaders may fail
-A recession begins
-Sharp rallies leading to further falls
-Few new floats
-The public lose interest
- Bear Market Phase3: DISTRESS SELLING
Key Indications
-Significant under valuation
-Unemployment peaks
-Many bankruptcies and failures
-Bad News is discounted
-Market rarely in the news
-Low public interest and participation
-Stock price charts show accumulation