TAILIEUCHUNG - Undeclared Stockmarket Secrets Chapter 4

CHAPTER FOUR THE ANATOMY OF A BULL OR BEAR MARKET. What starts a bull market? To start the process, an Index [or the stocks it represents] start to fall in price day after day, week after week, punctuated with small up moves with lower tops and lower bottoms as seen in a bear market. | CHAPTER FOUR THE ANATOMY OF A BULL OR BEAR MARKET What starts a bull market To start the process an Index or the stocks it represents start to fall in price day after day week after week punctuated with small up moves with lower tops and lower bottoms as seen in a bear market. There will be a low level reached at some time where weak holders will start to panic The Herd and will tend to sell their stock holdings at the same time. This is because they are all being effected by the same psychological pressures and fear even lower prices. These weak holders cannot stand any more losses and are fearful of even further losses. Fear is intensified as the markets fall because one thing is certain the news will be bad. As these traders sell professional money will step in and start buying because in their view this stock can now be sold at a higher price at a later date. The panicky selling has also given professional money the opportunity to buy very large amounts of stock without putting the price up against their own buying accumulation . There is nothing unusual about this it is the natural instinct of people who all like to buy something on the cheap that is if they have the money available and can recognise it is bargain day. This process is going on all the time creating either a small move or a large move. Any move that does start is in direct proportion to the amount of shares that have changed hands. To create a major bull market you need to see the extremes of this process at work. This is known as a Selling Climax and will mark the low point of the market while the opposite is a Buying Climax and will mark the high point of a market. The Selling Climax phenomenon occurs when there has been a major transfer of stock from weak holders that is - traders who have been locked-in at higher prices suffering the fear and pressure of losses which cannot be tolerated any longer decide to sell. However somebody has to be prepared to buy at these times. It is professional

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