BassmanElliott Wave would tell you that bull markets are 3 legs...

Bassman

Elliott Wave would tell you that bull markets are 3 legs up.

The first (after a bear market) seems to make no sense as fundamentals and news is still bad.

Then the market gets worried that it might have jumped the gun and has a downward corrrection but not to new lows.

The next move up occurs with better news and all stocks participate. The move is persistent and being any sort of contrarian is a recipe for disaster.

Then there is a surprise correction which is often swift and leaves the fundamentalists bemused as all looks OK.

Then comes the 3rd and final leg up. Fundamentals are starting to weaken but now sentiment is extremely bullish and every man and his dog knows buying shares is the path to prosperity. Worthless companies are touted as the next BHP etc. and every announcement by little companies send them rocketing.

Then comes the bear regardless of central banks, governments, or whatever.

When many have lost much more than they ever made and vow to never buy shares again, a new bull market will start.

I feel we are in the correction before the last up move but of course it is never exactly the same and markets need to vary themselves enough to confuse as many as possible.

If you read, you will notice that the old guys rarely get caught out. They have seen it all and no amount of hype will have them participating against the natural ebb and flow of the market.