The financial-media-lite is twisting itself into pretzels trying to define, categorize, and pigeonhole recent market action into a systematic taxonomy. I’ve written before on the folly of simplistically defining bull markets, bear markets and corrections by the size of the move:
As much as financial journalists might wish the markets to conform to their dictates, the markets refuse.
A recent example of this silliness:
“Blink and you may have missed it — the Dow Jones Industrial Average ￼is in a bull market, reached on a day when data showed a record number of people filing for unemployment benefits.” – MarketWatch – Why this wild coronavirus rally has Wall Street experts fearing a bull-market trap
Really? The rush to declare the bear market over by defining it out of existence is enough to make Don Quixote blush. So if the decline had been followed by a 20.1% rally the bear market would be over, but if the rally only managed 19.9% it would continue? Nuts.
Sensible analysts scoff at such word games:
”I think you have to be a fool to actually think that the stock market moving an arbitrary 20% in either direction means anything to anyone anywhere in the world,” wrote said JC Parets, who runs research firm All Star Charts, on Friday.” – MarketWatch – Does the Dow’s 21% surge in 3 days put it back in a bull market? ‘The market doesn’t work that way,’ says one researcher
The traditional meaning of a bull or bear market – a uptrend or downtrend extended over a substantial time frame – worked. The new magic 20% threshold doesn’t.