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How to Spot a Bull or Bear Market
What is a bear market? The popular definition is a 20 percent drop from peak to trough in multiple broad market indexes. I have seen similar round numbers in other definitions -- e.g., a correction is a 10 percent decline, a dip is a 5 percent drop and a crash is a fall of 30 percent or more. Other than the fact that these are all base 10 numerals -- a coincidence of primates having 10 fingers and 10 toes -- there is no rational basis for these percentile heuristics. There certainly doesn’t seem to be any hard data supporting the significance of these percentages. Now consider the opposite: The definition of a bull ... (full story)