STOCK MARKET CRASH, MARKET CORRECTIONS, BEAR MARKETS

So alot of terms being throw around about a Market Crash. Some people saying the market needs a correction, and others saying we have entered a bear market. They are not the same so what do each one of these look like?

A Stock Market Crash

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This is usually caused by some economic damning event. Anything that would scare an investor into thinking our country and market are in real danger. This will usually cause a sharp drop in price, indicating fear is driving the market.


Market Correction


Usually multiple sharp drops and bounces in the nominal price of the company, and can be cause by inflation fears as they are now. This allows the market to regain its footing at a less overvalued level. Generally when playing the corrections the price will be trading within a channel and continue to bounce and drop until investors sentiment changes

Bear Market



A bear market is when investor sentiment is pessimistic across the market and we can see up to a 20 percent pull back from recent highs. Described as more of a slow declined or controlled pullback.

Just thought I would post a quick elaboration on each. There are so many factors that can cause both but all generally center around these rules.