10 Reasons Bull Markets SteamRoll Bears

bull market imageSure all bull markets have pullbacks. And it’s not uncommon for bull markets to have a few corrections. But each one breeds more bears with reasons and explanations for why the market shouldn’t go higher. And as bears build up short positions in bull markets, they often get steam rolled… adding steam to the bull market.

Here are 10 reasons why bull markets often steam roll the bears:

1.  At all-time-highs all holders are profitable. There is little fear and fewer reasons to drive them to sell.

2.  There is no selling pressure on the holders of current positions so they aren’t forced to sell.

Sign up for our FREE newsletter
and receive our best trading ideas and research

3.  With the majority sitting on their current positions, short sellers tend to be the primary ones selling.

4.  As prices go higher, short sellers are then forced to buy back at those higher prices, creating buying pressure.

5.  With the market holding key support levels, stop losses are rarely hit so there is less selling pressure coming from properly placed stop losses (or trailing stops). So bulls can let winners run.

6.  The pressure picks up on traders and investors that missed the move higher. They then wind up “chasing” and buy stocks at higher levels after under performing the market day after day.

7.  Buyers are waiting to buy dips at many support levels so they can get in at the first opportunity. As buyers want back in, this creates levels of support.

8.  Central banks are on the side of the bulls. Traders can’t fight the FED.

9.  Bull markets have no long-term resistance levels.

10.  When stocks are under accumulation it is a long process for them to start being distributed again. It is a path mixed with many strong rallies. The short side of bull markets is not where the money is. The short side of bear market is not even an easy path.

Thanks for reading.

     Read more from Steve on his blog NewTraderU.

     Twitter: @SJosephBurns

Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.