Bull, Bear, Bullion and Prediction Analysis
*Dr. D. R. Rajashekhara Swamy & **Rangaswamy A.S
*Director, Professor, Department of Management Studies, rajukambaina@gmail.com, Mobile No. 8105936464
**Assistant Professor, Department of Management Studies, rnaganirmita89@gmail.com, Mobile No. 9986383982
Abstract
No matter how brawny the ground rules are, strong negative sentiments can pull down a strong bull market.
Market crashes and sharp corrections in the stock market are no longer a rare phenomenon. Bull or bear, instances
and outlook has proved to be an uncontrollable clout in taming them down. As it is observed economy and the
financial markets are closely related. A rise or fall in the financial market will affect the economy of the state. In fact
the economic conditions of the nation are better expressed in connection with the financial market status.
When the financial market increases in terms of value, the economy is usually referred to as bull market.
There is an expectation of making profit and hence the people start investing without fear of declining market. Bear
market is condition which speaks about reverse or opposite condition. It is the economic conditions which exist
when the financial market is decreasing in value. When bear market continues in the economy, there is chance of
economic depression.
This article investigates the sign and magnitude of a number of factors risk premia between up-Bull and
down-Bear market movements, impact of two contenders on the economic performance of the global economy and
it also exhibit the relationship between bull and bullion and shows the gold bullion market effects and various
factors that contributes the gold rush in the future as well.
Key Words: Stock Market, Bull, Bear, Financial Market, Great fall
Introduction
Maheu M. John et al, (2012) claims that there is a widespread belief by investors, policy makers and
academics that low frequency trends to exist in the stock market. Traditionally the positive and negative low
frequency trends have been labeled as bull and bear markets respectively. Bull vs. Bear used by stock brokers and
Wall Street insiders tends to be rather complicated what with jargon such as margins, small cap, and indices.
Stock market terms Bull and Bear date back to the 19 th century and are not tied to any complicated
mathematical analysis, while the origin of the terms might be somewhat vague. Their definitions are quite precise
Bull refers to an investor who believes that a market or individual stock issue will rise in value. A Bear is
someone who believes the opposite. Generally, a rise or fall of 20% is the benchmark for describing a bull or bear
market.
The behavior and the observable features of stock market prices, such as their unpredictable, fluctuating
nature and tendency to generate alternating periods of generally falling prices, so-called Bull and Bear markets that
seem suddenly to switch from one to the other at irregular intervals, are derivable from the way market participants
behave (R.H. Day and W. Huang Journal of Economic Behavior and Organization 14 (1990).
Great Pit falls of world market a comparative analysis
Strong negative sentiments can pull down a strong bull market. Market crashes and sharp corrections in the
stock market are no longer a rare phenomenon. Bull or bear, instances and outlook has proved to be an
uncontrollable clout in taming them down.
Great bear market provoked negative thinking and it always run down towards as well as it cause for the
great depression. Because the world is currently experiencing one of its worst bear markets since the Great
Depression, there is an even greater need to study past bull and bear markets to make long-term decisions about
investing in the stock market. Here we provide small data regarding the bull and bear market trends in different
periods in different countries.
Table 1 provides the clear information related to the great pit fall of the stock markets since 18 th century in
the naive environment.
Table 1
An Analysis of Dow Jones Stock Market Average with Bottom Bear
Bear bottom from the crash of October 2008 until August 2010 weekly report comparing crash of 1929-32
with 2008s bear market. The great depression bear from start to finish lasted only 149 weeks while bear market still
has a long way to go. Even after massive decline in the Dow Jones of 53.78 on 09 March (the second worst in
history) the worst still to come. Table 2 shows massive -40% Dow Jones Bear market from 1885-2011. Only two of
these bear markets lasts longer than bear market 190 weeks.
Table 2:
Table 3: Dow Jones Industrial Average
Table 4: Dow Jones Industrial (8 Days) Average
(Sources: 1922-1929 measures are from the Stock Market Study, U.S. Senate, 1955, pp. 40, 49, 110, and 111; 19301932 Wig more, 1985, pp. 637-63).
The table 4 shows eight trading days, the DJIA would drop a total of 2,399.47 points or 22.11%. The market would
rebound sharply on Monday October 13, and rise 936.42 points, only to drop 733.08 points on Wednesday of that
same week.
Bull and Bullion An Overview
Besides the direct bullion market participants, other professional parties like investment companies and
jewelers use bullion in the context of products or services which they produce or offer to customers (Przemyslaw
Radom Ski, 2012) Private individuals use bullion primarily as an investment or potential store of value. Gold bullion
and silver bullion are the most important forms of physical precious metals investments. Bullion investments can be
considered as insurance against inflation or economic turmoil and may not entail direct counterparty risk (OTC
guide 2008).
Bull in bullion
Gold has been one of the most volatile markets. But gold is bullish and the major trend is up, despite the
volatility. In fact, gold has held firmly above its $1,600 major support, which has become increasingly important.
Whenever gold sells off, big buyers come in to take advantage of lower prices. This is a pattern we have seen
consistently and expect it will continue.
Golds Bullish Factors (Source: Economic Times 2012)
As Q2 gets underway, stocks declined.
Euro zone may be unable to handle the brewing potential problem as easily as it did in Greece is weighing
on stocks and pushing up gold. Demand is also an ongoing factor that is keeping a solid floor under the
gold price.
Central banks have been steady buyers as they grow weary of the Feds monetary actions and build their
gold reserves, and China remains at the forefront. Not only is China the worlds biggest gold producer, its
also the worlds biggest gold buyer.
Inflation is brewing due to the Feds policies while real interest rates are below zero. Both are very bullish
signs for gold.
GOLD V/S GOLD STOCK
Gold shares lost their super strength following the 2008 plunge. Above chart shows gold and gold shares
indexed to 100 starting in 1968. The chart shows golds ongoing strength compared to gold shares over the last 40
years. But looking at the indicator, B, gold was super cheap versus gold shares. This proved to be true in 2010 and
gold has outperformed gold shares since then. The indicator, however, is now approaching a gold high area, which
means gold is getting too high versus gold shares, and the time is coming right up. In other words, gold shares are
near a bottom. Overall, we dont think gold shares are leading the way for gold. On the contrary, it looks like its just
a matter of time until gold shares catch up to the gold price.
Bullion Prediction for the Future Safety
There are two ways of prediction for the bullion market. One the bullion market is Golds Calm for 7
months creates more Bears and another one and gold rushes to $ 2600 in 2013.
Prediction 1: After a steady consistent rise in gold for 11 years, we can understand why some feel the bull market is
over. But dont be fooled, a trend is in motion until its over. This is a simple yet powerful phrase, and it tells us to
stay invested until the move is over.
Its amazing to think that gold has risen 660% since 2001, or even better, it rose 170% from the 2008 low to
last Septembers record high near $1900, without much of a decline along the way. Yet the decline from its
September peak has so far been less than 20%. And even if gold were to decline below $1600 to last Decembers
low near $1540, it would still be a mild decline compared to the rise.
Prediction 2: Investors who dreamed of a record year for gold prices have had little to cheer about thus far in 2012.
After touching an all-time high of more than $1,920 US an ounce in September 2011, bullion has struggled to regain
that lofty level since. Even after surge of nearly $20 an ounce, gold is still about $190 or nearly 10 per cent below
last years record peak. Meanwhile, many leading gold stocks have taken a beating as rising costs, construction
delays and operating snafus have hammered producers profit margins.
Conclusion
The war between bull and bear causes the great pit falls of the stock markets, and leads investors and
companies to face the situation of insolvency and pushes the economy to great depression. The great bear market
provoked negative thinking always run down towards as well as it cause for the great depression. The world is
currently experiencing one of its worst bear markets since the Great Depression and it affects economy in many
terms leading to investors suicide.
Bull and bear are the two contenders in the stock market, and act as key player in the economy. The fight
between two contenders is to economic sustain (Bull) and economic decline (Bear). Taming bull and bear in the
battle filed is highly difficult and the prediction as well. Bullion bull waiting for the gold rushes to $ 2600 in 2013,
and bear Golds Calm for 7 months creates more Bears. The prediction is depending on the investors perception.
Contenders are performing based on the demand, supply, and consumption level of the country and the interest of
the investors as well.
Reference
A hands on look at the market : Pamela Aden 2012
Bullion Volatile with in the Bull market : Pamela Aden 2008
IDENTIFYING BEAR MARKET BOTTOMS AND NEW BULL MARKETS: Paul F. Desmond
Lowrys Reports Inc. 26 February 2002.
Dow Jones Industrial average: Bear market bottoms: Mark .J. Linden.
Gold V/S Gold Stock : Hamilton
Golds Doubling Effects: Jason Hamilton 2012
Prezmysaw Radom Ski : Key insight to portfolio structure 2008
Super rich Investors buying gold in tone to dodge economic worries : Economic times
A guide to the London precious metal: OTC Guide 2008.
