A market trend is a tendency of financial markets to move in a particular direction over time. These trends are classified as secular for long time frames, primary for medium time frames, and secondary for short time frames. Traders identify market trends using technical analysis, a framework which characterizes market trends as predictable price tendencies within the market when price reaches support and resistance levels, varying over time.
Strictly, a trend can only be determined in hindsight, since at any time prices in the future are not known, although derivatives such as futures and options can give a clue about expectations.
The terms bull market and bear market describe upward and downward market trends, respectively, and can be used to describe either the market as a whole or specific sectors and securities. The names perhaps correspond to the fact that a bull attacks from the ground lifting its horns upward, while a bear strikes from above moving its claws in a downward motion.
The US bear market 2007–2009 was declared in June 2008 when the Dow Jones Industrial Average (DJIA) had fallen 20% from its October 11, 2007 high. This followed the United States bull market of 2002–07 and was followed by the United States bull market of 2009–2015.
The DJIA, a price-weighted average (adjusted for splits and dividends) of 30 large companies on the New York Stock Exchange, peaked on October 9, 2007 with a closing price of 14,164.53. On October 11, 2007, the DJIA hit an intra-day peak of 14,198.10 before starting its decline.
The decline of 20% by mid-2008 was in tandem with other stock markets across the globe. On September 29, 2008, the DJIA had a record-breaking drop of 777.68 with a close at 10,365.45. The DJIA hit a market low of 6,443.27 on March 6, 2009, having lost over 54% of its value since the October 9, 2007 high. The bear market reversed course on March 9, 2009, as the DJIA rebounded more than 20% from its low to 7924.56 after a mere three weeks of gains.
After March 9, the S&P 500 was up 30% by mid May and over 60% by the end of the year.