The Everlasting War Within the Stock Market.

The Bears vs. the Bulls, oh, a continuous battle originating from the dawn of times in USA’s epic history, which is in no way, shape, or form drawing signs of the end. Every year it’s a constant battle, with the bears trying to throw shade at the bulls, dragging the market down a teensy bit, but the Bulls coming back more vital than ever, tugging and launching the market up to the MOOOOON…

This past year was a perfect example of this constant strain on the market. Imagine in your astute noggin, a time of uncertainty in the world, a place filled with criminals constantly enacting horrible actions. At the same time, the general population tries to fight back and eliminate the problem causing all these uprisings in criminal action. The rebellion of criminal action was due to an array of issues, one with many rule changes that were put in place to allow these problems to occur, a weakened law enforcement, and an economic crisis. The criminals are taking advantage of it. Well, in those specific times of crisis, you have multitudes of people come together and fight it as a unit. They try to implement specific changes within the government and recruit people to that weakened law enforcement. The criminals in the case could be considered bears, and the organization that is configuring a solution would be the bulls. Look, it’s not to say the bears are any bad; most of the time, red, meaning going down, meaning bear, is associated with evil, while green, going up, meaning bull, tends to be paired with the word good. 

The imaginative example in the last paragraph could be related to what has happened in the market in the past couple of years. The Bears(criminals) strutted out the gate red, steamy hot, with a massive lead to the start of 2022. This had some devastating drops. These bears were munching at the market and taking full advantage of what was occurring on the outside, but why?!?! This was mostly because of the copious amounts of bad news that started the year.  

One Instance Of A Massive Fued Between The Bears And Bulls

Well, the first step out of 2021 and opening a door into 2022, massive downsides were happening left and right in the market. By the middle of 2022, there was upwards of an overall 21% decrease in the S&P 500. These were massive, volatile moves that shook the whole of the world. Even people in the middle of the Sahara desert caught wind of the disastrous situation America was in. Everyone and their moms thought this could be the start of a modern time recession and could cause horrible ramifications on a plethora of people’s livelihoods. The Bulls took a massive lead to start this year; let’s see if they could hold it, and why they were taking this unprecedented lead. 

From the beginning of 2022 to the middle, there were tons of uncertainties throughout the market in unemployment rates and inflation, the USA then was in a pickle. Well, before that they had pretty historical inflation lows during 2020 in Covid, Covid indirectly caused an outbreak in a rise in numerous consumer prices for goods and services. This had a massive impact on core inflation(the change in the costs of goods and services, excluding the food and energy sectors); as mentioned earlier, employment and labor markets tightened and increased in slack, leading core inflation to rise. The FED, the people whose main responsibility is to determine interest rates, survey financial markets, and manage the money supply, had the target for inflation rates at 2%; that target was wiped out of the frame with interest rates rising to a staggering 9%, bringing immediate direction for the FED to start to go ham on the interest rates. Interest rates benefit inflation due to the higher borrowing rates for money at the bank, which will prevent people from mindlessly borrowing money. Now they would have to think it through intelligently and, in most case scenarios, not retrieve that beloved loan at 9% interest rates. This leads people to have less demand on prices thus leading to lower prices. 

This was the plan envisioned by the FED to stabilize the economy from its unstable, unpredictable market. These FED rates were not light at all, they came vicious and as if they needed to get stuff done NOW. 75 basis points move as the regular for five straight months, stretching the latter half of 2022 from June- to Dec. Eventually, when they finished, they ended up at 5.33% as of writing this in Feb 2024. This, incorporated with inflation still increasing as interest rates rose, caused a deadly combo and a massive stir in the market, eating all the progress made in the past years, almost ending up in a recession. The bears were closer than a pennie thickness to rising into the heavens of a downturn for them. Unfortunately for the Bears, the Bulls swooped into the game with a late-game comeback in the nick of time to shift the energy back to them.

Even during this, it was a constant battle between bulls and bears; some people suggested that a recession was coming, while others were optimistic about purchasing the market unconditionally with no sign of stopping at such a low. The market had its ups and downs, tension from both sides, some months of great news, and the next bad, where both sides had their feast. However, the American economy is always said to be progressive.

Inflation starting to head down, and tech stocks outperforming, some notable mentions, NVDA, MSFT, and more, not only started to thrust the market, but it reached heights it never graced before. Nonetheless, the Bulls have won the drawn-out battle between the two throughout the past two years 

 

Shorting and Buying 

You may be thinking to yourself, how do I make money if you would want to be either bull or bear? Well, all you have to do is either buy, which is being a bull, or short, meaning being a bear. It’s not as if you have to choose one side and stick to it forever; at any given day at any given time,, you can switch sides any time you want, depending on your broker, and try to tweak your analysis or switch your market evaluation. This type of trading is day trading.

This form of trading in many people’s eyes, is the most dangerous, Don’t count me out on this, I used to day trade and it was one hell of a ride. At some points, you’re at the highs reaching the heights of the Burj Khalifa and then in other moments, you’re 6 feet under the ground trying to climb out of the rabbit hole you got yourself stuck in. A high-rise winning trade can instantly turn into a massive hit/loss. That’s what it means to trade today. The rewards are so fulfilling and rewarding, but the losses are detrimental and impactful not only to your portfolio but also to your mentality. It could be so mentally draining to the point of complete insanity. I am telling you from dear experience,  emphasize the will because no matter how hard-headed and strong your mentality is even if it is up to the likelihood of David Goggin, it WILL, with no doubt, drive you not to stop dwelling upon that one trade you lost 100 bucks on Friday. On the weekend, you are just itching to get another trade-in to recoup the money, at least in the beginning.

I mean, with anything, you’re at risk, so I’m not saying to ditch the idea of day trading altogether. It’s just highly taxing on your mentality, and few people come out on the good side of day trading. Day trading consists of multiple options, like the good old buying and shorting, options trading(puts and calls), and futures. If it were to be considered a day trade, it would have to be a call, put, buy, short, or future that you hold from a fraction of a day to upwards of 5 days.

Day trading isn’t the only form of trading if you want to participate in some market endeavors; there are a whole plethora of different types, including fundamental, technical, noise, sentiment, swing, contrarian, arbitrage, scalping, position, intraday, price action, algorithmic, event-driven, long term holder. All of these are formed upon the foundation of predicting where the market will end up, either going up or down; it’s never the in-between in a certain time frame, whether a minute or a whole year. 

Daily with what was mentioned earlier, countless millionaires are forged and even torn apart, mauled by the carnivorous market, by being either a bull or a bear. There are endless opportunities in the market, but approach trading with caution. Make sure to do research and well sound analysis of your strategy before entering any trade. Also, never risk what you can’t lose. Especially, don’t lose your cool and get that monei monei monei!!! GIVE ME DA MONEY HONEY!!!!

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