What is a Stock Market Trend?

What is a Stock Market Trend

A stock market trend is the tendency of the prices of different kinds of stock to go up or down for periods of time. For example, after the terrorist attacks of September 11, the stock market prices for technology companies went down, causing many people to lose a lot of money, if they were hoping to make a profit in a short period of time.

Events in the world have a great effect on the stock market trends. The present crisis in Iraq and the Middle East has an effect on oil prices. Those of us who have to buy the oil and gas hare paying high prices, but anyone who has investments in oil stocks are making huge profits because of the price and the demand. Demand for a product affects the price of its stock. Therefore the stock market trend for oil and gas right now is that the prices are rising.

Prices fluctuate on the world market and many factors influence these prices. Mostly it is supply and demand. If a company has only a few shares it wished to sell, but there are a lot of interested investors, then the price will go up. It also works the other way in that if a company has a lot of shares but few interested buyers, the price goes down.

The usual factors that affect stock market trends are wars, the economy, oil prices and currency collapses. The trends in the stock market are usually called "bull" and "bear". Bull trends mean that the upward movements in prices of certain sectors that can last for months or years, while bear trends refer to downward movements in the prices.

Bull markets spark a revived confidence in the market and investors are eager to invest in companies. Business conditions improve as the prices rise in response to improvements in the economy. Prices are sometimes based on expectations rather than reality. These speculations often pay off for investors who are willing to take the chance. Bear markets are periods of decline in the marketplace, with prices falling in response to disappointing earnings from companies who were expected to do well.

When you are investing in the stock market you have to be aware of the stock market trends. These trends tell you whether the time is right to buy or sell your stock.