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Secondary Market Trends



Secondary trends are short-term changes in price track against a primary trend. They generally last between a few weeks and a few months. Whether a trend is a secondary trend, or the commencement of a primary trend, can only be identified once it has either ended or has exceeded the extent of a secondary trend. A turn down in prices during a primary trend bull market is called a market correction. A correction is generally a decline of 10% to 20%, but some experts say it can be a third or more. It differs from a bear market regularly in that it has a lesser magnitude and duration.

A amplify in prices during a primary trend bear market is called a bear market rally. A bear market rally is every so often defined as an increase of 10% to 20%. Bear market rallies characteristically begin suddenly and are often short-lived. Distinguished bear market rallies occurred in the Dow Jones index after the 1929 stock market break down leading down to the market bottom in 1932, and throughout the late 1960s and early 1970s. The Japanese Nikkei stock average has been typified by a number of bear market rallies since the late 1980s while experiencing an on the whole long-term downward trend.

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