How to judge a bull market in stock trading? How many stages does a bull market divide into?

For beginners in the stock market, what they definitely want to know is how to judge a bull market? How many stages does a bull market divide into?

Let's start with the cycle.

What is a complete bull bear cycle?

In the domestic stock market25In the ups and downs of the year, a total of5Wheel ox bear. As the saying goes, a bear market5Bull market1In the year, there were various myths born and declined in every market bull bear transformation. A complete bull bear cycle is not only about the bull and bear periods that investors are more concerned about, but also more about the connection between market fluctuations.

Before the arrival of a bull market, it was not a bear market, but a continuous period of volatility at the end of the bear market. such as14-15Before the arrival of the New Year bull market, the last round of bear tail arrived2012year1The month has already ended, since2012year1Month to2014year6For two and a half years, the month has been fluctuating in the bottom range.

So, the bull bear cycle we are discussing will start with the bear tail. The stock market is in a bear tail period, and at this time, the stock market plummets and tens of thousands of people are bearish. The policy has started to shift towards relaxation, and the profitability of enterprises has improved. However, due to the lagging economic indicators and corporate profits, the market will only see this year's financial statements next year, so it is difficult for these indicators to be reflected in the stock price in the first place.

At this point, investors are still very concerned about the fundamentals of future companies solely under the influence of policies, and are afraid to invest heavily in the market, leading to a long period of volatility and bottoming out. Often, companies with outstanding performance will stand out at this time.

The policy aspect belongs to the leading indicator, and the macro environment has turned positive. However, the market still needs time to recognize and test this turn. When companies are gradually affected by the policy aspect and hand over their magnificent transcripts, they will receive full recognition from investors. The doubts during the period of volatility will begin to disappear, and funds will take over and enter the market, opening a bull market.

Happy people are always similar, while unfortunate people have their own misfortunes. After the carnival of the bull market, the market sentiment is more excited. In order to prevent financial risks, the country will take various means to suppress the market, such as2015The trigger for the 1000 share limit drop in was the regulatory review of over-the-counter financing,2011The decline in economic growth and monetary tightening policies in,2008Just in time for the global financial crisis... A bear market that comes too quickly always catches people off guard, perhaps one day it can make you turn off the lights and eat noodles.

What is the entire process of a bull market?

The taste of a bull market is always tempting. Some people can taste a cup of soup, while others can only be trapped by high prices because everyone enters a different stage. We can divide the bull market into the following three stages based on investors' entry psychology.

Niu Phase I

The first stage of a bull market is what we often refer to as the "overcoming fear" stage. After experiencing consecutive sharp stock market declines, the first group of investors who can overcome fear will begin to return to their understanding of the actual value of the stock and make corresponding value investments.

In fact, after experiencing a long bear market, there are stocks with deep discounts everywhere. The extremely low P/E ratio will allow experienced investors to enter early and pick up bargains, and the extremely low chip cost will also give them an advantage in the subsequent bull market development process.

The bull stage is often spent in the market's questioning, and the timing of judging the bull stage has to test each company's level. Building positions too early or too late can affect the cost of bottoming out.

Niu Phase II

At this stage, the company's profit level and growth rate began to be announced in the market, and the profit making effect of the company made more people willing to participate, leading to an increase in stock prices. However, after the same stock has undergone repeated market valuations and chewing, the driving factor for the stock price to rise is more about how much the stock will be worth in the future, rather than how much it is currently worth in the bull stage.

The expectation of future valuation is ultimately a very elusive thing, so the bull phase II is also the beginning of market hype and storytelling and pie making.

Cattle Phase III

If the first stage of the Ox is a relatively challenging "overcoming fear" stage, then the third stage of the Ox is a particularly challenging "overcoming greed" stage of human nature. When the actual value and future expectations of stocks are sucked away by the market, the rise of stocks at this stage is entirely supported by the imagination and greed of the market, and the speculative sentiment in the market is very strong.

If heaven wants to destroy it, it must first make it crazy. The drumming and flower passing game in the third stage of the bull market will eventually come to an end, and the bull market will also disappear.

How to purchase stocks based on the characteristics of bull market stages?

We can see from the above that in a complete bull bear cycle, the bull market of essence is really short. Maybe the bear market comes unexpectedly and makes people cry before they react to it. The bottoming period is mixed, and investors are hard to pick excellent underlying stocks. However, investors can find suitable private equity funds to invest on private equity ranking websites that do not charge subscription fees.

So how should we cherish the bull market, grasp the trend of the bull market, and purchase corresponding stocks?

At the beginning of a bull market, many people would think that it was definitely the first rise in the securities sector. In fact, as a star of the bull market, securities stocks usually appear in the middle and early stages of the bull market. The first to make their debut are large blue chip stocks, such as banks, oil, and infrastructure sectors... In the large market index, blue chip stocks hold a relatively large weight, and their rise plays a role in carrying the flag in the team. The rise of the large market index has warmed up the market and restored investors' trust.

When the market gradually became restless and trading volume significantly increased, the securities brokerage sector also made a shining debut. At this point, the market will find that the blue chip market is generally on the large side, with a huge demand for funds, which makes it too difficult to rise. Therefore, the market hotspot has shifted to various white horse stocks, blue chip stocks, industry leaders, and other second tier blue chips, such as securities, steel, free trade zones, manufacturing, aviation, maritime transportation, color, coal, cement and other industry leaders and companies with good performance.

With the continuous entry of funds, when the whole market has become very hot, the market will feel that the value investment is too monotonous, and the market will look for some penny stock, theme stocks, low market capitalization stocks, imagination stocks... to speculate. This type of stock usually has characteristics such as small plate size, high turnover rate, and exciting company stories, with most companies on the ChiNext board and technology stocks.

In the end, even walking on the street, people began to discuss stocks, and at that time, the market also began its final carnival. At this time, the market trading volume reached its peak, and it was not a problem to trade trillions of dollars a day. And... you understand.