# Bulls vs Bears: Bull Market vs Bear Market Explained Published: 2026-04-19 Author: Warren Team URL: https://www.heywarren.com/blog/bulls-vs-bears --- The bronze "Charging Bull" outside the [New York Stock Exchange](https://www.nyse.com/) weighs 7,100 pounds and stands 11 feet tall. Italian-American sculptor Arturo Di Modica installed it on Wall Street one December night in 1989 as guerrilla art — a defiant gift to a city still recovering from the 1987 crash. Within a year, that uninvited statue became the global symbol of the entire financial industry. The bull, not the bear, won the front lawn. That detail captures why bulls vs bears is the most enduring vocabulary in investing. Most people use the terms loosely — "I'm bullish on tech" or "the market feels bearish" — without knowing the precise thresholds, the historical episodes, or the strategic differences that define each regime. A bear market is not just a "bad week." It has a number attached. So does a bull. This guide walks through what bulls and bears actually mean, where the words came from, the technical 20% rule that separates a correction from a true bear market, and how seasoned investors shift their playbook between the two. You'll see the famous bull and bear runs of the past century, learn the sentiment indicators that signal turning points, and leave understanding why every analyst note frames the world as a "bull case" or "bear case." ## Bulls vs Bears Explained: The 20% Rule In financial markets, bulls vs bears refers to two opposing regimes. A **[bull market](/blog/bullish-vs-bear-market)** is a sustained price rise of 20% or more from a recent low, while a **bear market** is a sustained decline of 20% or more from a recent peak. The thresholds are conventional, not legal — but every major index publisher, news outlet, and strategist uses them. ![The 20% threshold separates a correction from an official bear market.](data:image/svg+xml,%3Csvg%20xmlns%3D%22http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg%22%20viewBox%3D%220%200%20800%20149%22%20width%3D%22800%22%20height%3D%22149%22%20role%3D%22img%22%3E%3Ctitle%3ETimeline%3C%2Ftitle%3E%3Crect%20width%3D%22100%25%22%20height%3D%22100%25%22%20fill%3D%22%23f8fafc%22%2F%3E%3Cline%20x1%3D%22137.5%22%20y1%3D%2255%22%20x2%3D%22662.5%22%20y2%3D%2255%22%20stroke%3D%22%23cbd5e1%22%20stroke-width%3D%223%22%2F%3E%3Ccircle%20cx%3D%22137.5%22%20cy%3D%2255%22%20r%3D%2224%22%20fill%3D%22white%22%20stroke%3D%22%23cbd5e1%22%20stroke-width%3D%222%22%2F%3E%3Ctext%20x%3D%22137.5%22%20y%3D%2260%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2215%22%20font-weight%3D%22700%22%20fill%3D%22%230f172a%22%3E1%3C%2Ftext%3E%3Ctext%20x%3D%22137.5%22%20y%3D%22101%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2212%22%20font-weight%3D%22600%22%20fill%3D%22%230f172a%22%3EPullback%3C%2Ftext%3E%3Ctext%20x%3D%22137.5%22%20y%3D%22119%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2210%22%20fill%3D%22%2364748b%22%3E5%E2%80%9310%25%20drop%3C%2Ftext%3E%3Ccircle%20cx%3D%22312.5%22%20cy%3D%2255%22%20r%3D%2224%22%20fill%3D%22white%22%20stroke%3D%22%23cbd5e1%22%20stroke-width%3D%222%22%2F%3E%3Ctext%20x%3D%22312.5%22%20y%3D%2260%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2215%22%20font-weight%3D%22700%22%20fill%3D%22%230f172a%22%3E2%3C%2Ftext%3E%3Ctext%20x%3D%22312.5%22%20y%3D%22101%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2212%22%20font-weight%3D%22600%22%20fill%3D%22%230f172a%22%3ECorrection%3C%2Ftext%3E%3Ctext%20x%3D%22312.5%22%20y%3D%22119%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2210%22%20fill%3D%22%2364748b%22%3E10%E2%80%9320%25%20drop%3C%2Ftext%3E%3Ccircle%20cx%3D%22487.5%22%20cy%3D%2255%22%20r%3D%2224%22%20fill%3D%22%232563eb%22%20stroke%3D%22%232563eb%22%20stroke-width%3D%223%22%2F%3E%3Ctext%20x%3D%22487.5%22%20y%3D%2260%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2215%22%20font-weight%3D%22700%22%20fill%3D%22white%22%3E3%3C%2Ftext%3E%3Ctext%20x%3D%22487.5%22%20y%3D%22101%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2212%22%20font-weight%3D%22600%22%20fill%3D%22%230f172a%22%3EBear%20Market%3C%2Ftext%3E%3Ctext%20x%3D%22487.5%22%20y%3D%22119%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2210%22%20fill%3D%22%2364748b%22%3E20%25%2B%20drop%3C%2Ftext%3E%3Ccircle%20cx%3D%22662.5%22%20cy%3D%2255%22%20r%3D%2224%22%20fill%3D%22white%22%20stroke%3D%22%23cbd5e1%22%20stroke-width%3D%222%22%2F%3E%3Ctext%20x%3D%22662.5%22%20y%3D%2260%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2215%22%20font-weight%3D%22700%22%20fill%3D%22%230f172a%22%3E4%3C%2Ftext%3E%3Ctext%20x%3D%22662.5%22%20y%3D%22101%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2212%22%20font-weight%3D%22600%22%20fill%3D%22%230f172a%22%3EBull%20Resumes%3C%2Ftext%3E%3Ctext%20x%3D%22662.5%22%20y%3D%22119%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2210%22%20fill%3D%22%2364748b%22%3E20%25%2B%20rebound%3C%2Ftext%3E%3C%2Fsvg%3E) *The 20% threshold separates a correction from an official bear market.* The "20%" line matters because it separates routine market noise from a genuine regime change. Smaller drops have their own labels. A **pullback** is a 5–10% dip. A **correction** is a decline of 10% or more but less than 20%. Once that 20% line is crossed, the market is officially in a bear, and the psychology shifts. The same math runs in reverse. A 20% rebound from the bear-market low typically marks the start of a new bull. The S&P 500 entered a fresh bull in October 2022, for example, after rising more than 20% from its June low — even though many investors still felt bearish. That gap between data and sentiment is one reason bull markets often start in fear and end in euphoria. Duration matters too. Average bull markets since World War II have lasted around 5 years and delivered roughly 180% total returns. Average bear markets, by contrast, last about 9–14 months and produce drawdowns near 35%. Bulls run longer; bears bite faster. ## Origin of the Terms: Why a Bull and a Bear? The bull and bear metaphors date back at least to 18th-century London. The most cited theory is behavioral: a **bull thrusts its horns up** when it attacks, while a **bear swipes its paws down**. The motion of each animal mirrors the direction of the price move it represents. It's a tidy mnemonic, and it has stuck for three centuries. A second theory traces the "bear" to the bearskin trade. **Bearskin jobbers** in early 1700s London would sell pelts they did not yet own, hoping to buy them back cheaper later — the original short sale. The proverb "don't sell the bear's skin before you've caught the bear" warned against the practice. Speculators who shorted South Sea Company stock during the 1720 bubble inherited the nickname. The "bull" likely emerged as the natural opposite, drawn from the popular blood sport of bull-and-bear baiting in Elizabethan and Stuart London. By the time Thomas Mortimer published *Every Man His Own Broker* in 1761, both terms were already in print as standard market slang. They crossed the Atlantic with American finance and were entrenched on Wall Street by the mid-19th century. ## Bull Market vs Bear Market Differences in Behavior The fastest way to feel the difference between bulls vs bears is to look at how prices, multiples, and investor mood behave in each. A **bull market** features rising prices, expanding valuation multiples, low volatility, and risk-on positioning. A **bear market** delivers the mirror image: falling prices, contracting multiples, high volatility, and a flight to safety. ![Bull markets last roughly 5 years on average; bear markets last 9–14 months.](data:image/svg+xml,%3Csvg%20xmlns%3D%22http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg%22%20viewBox%3D%220%200%20800%20210%22%20width%3D%22800%22%20height%3D%22210%22%20role%3D%22img%22%3E%3Ctitle%3EComparison%3C%2Ftitle%3E%3Crect%20width%3D%22100%25%22%20height%3D%22100%25%22%20fill%3D%22%23f8fafc%22%2F%3E%3Ctext%20x%3D%22230%22%20y%3D%2257.5%22%20text-anchor%3D%22end%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2214%22%20font-weight%3D%22600%22%20fill%3D%22%230f172a%22%3EBull%20Market%3C%2Ftext%3E%3Crect%20x%3D%22240%22%20y%3D%2225%22%20width%3D%22450%22%20height%3D%2255%22%20rx%3D%226%22%20fill%3D%22%232563eb%22%2F%3E%3Ctext%20x%3D%22702%22%20y%3D%2257.5%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2214%22%20font-weight%3D%22700%22%20fill%3D%22%232563eb%22%3Emonths60%3C%2Ftext%3E%3Ctext%20x%3D%22230%22%20y%3D%22152.5%22%20text-anchor%3D%22end%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2214%22%20font-weight%3D%22600%22%20fill%3D%22%230f172a%22%3EBear%20Market%3C%2Ftext%3E%3Crect%20x%3D%22240%22%20y%3D%22120%22%20width%3D%2282.5%22%20height%3D%2255%22%20rx%3D%226%22%20fill%3D%22%237c3aed%22%2F%3E%3Ctext%20x%3D%22334.5%22%20y%3D%22152.5%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2214%22%20font-weight%3D%22700%22%20fill%3D%22%237c3aed%22%3Emonths11%3C%2Ftext%3E%3C%2Fsvg%3E) *Bull markets last roughly 5 years on average; bear markets last 9–14 months.* ### Bull Market Characteristics In a bull, the trend channel slopes up and pullbacks get bought quickly. The CBOE Volatility Index (VIX) typically sits below its long-term average of 19, often in the low teens. Price-to-earnings multiples expand as investors pay more per dollar of earnings, betting that growth continues. IPO activity surges, M&A picks up, and small caps and cyclicals lead. Sentiment turns optimistic. The American Association of Individual Investors (AAII) Sentiment Survey shows bullish readings above 40%. Margin debt rises. Cash levels at mutual funds fall. Late-stage bulls often produce the parabolic "melt-up" that history later labels a bubble. ### Bear Market Characteristics In a bear, the trend channel slopes down and rallies get sold. Volatility explodes — the VIX commonly spikes above 30 and can pierce 80 in true panics, as it did in 2008 and March 2020. Multiples compress as earnings estimates get cut and investors demand a higher risk premium. Defensive sectors (consumer staples, utilities, healthcare) outperform. Bear markets often coincide with **recessions**, but not always. The 1987 crash and the 2022 selloff each happened without a recession by official definition. When a bear does pair with a recession, drawdowns deepen and recoveries lengthen. Pessimism becomes self-reinforcing: forced selling begets more forced selling. ## Famous Bull and Bear Markets in History Knowing the history makes bulls vs bears feel less abstract. Each of the great runs has its own personality, its own catalyst, and its own end. ### Famous Bull Markets The post-World War II expansion (1949–1968) was the first secular bull of the modern era — the S&P 500 climbed roughly 800% as the U.S. consumer economy boomed. The **1982–2000 secular bull** is the longest and largest on record, a 17-year run that produced a 1,400%+ gain in the S&P 500, fueled by disinflation under Paul Volcker, the Reagan-era tax cuts, and the personal-computer and internet revolutions. The **2009–2020 bull market** ran for nearly 11 years, the longest single uninterrupted bull on record at the time, lifting the S&P 500 more than 400% from its March 2009 low. It ended in 33 days during the COVID crash. The **2020–2022 bull** that followed was sharp and brief, doubling the index off the COVID low before peaking in January 2022. ### Famous Bear Markets The **1929–1932** crash is the worst bear market in U.S. history. The Dow lost roughly 89% from peak to trough as the Great Depression set in, and the index did not regain its 1929 high until 1954. The **1973–1974** bear, triggered by the OPEC oil embargo and stagflation, took the S&P 500 down about 48% over 21 months. The **2000–2002 dotcom bust** wiped 49% off the S&P 500 and roughly 78% off the [Nasdaq](https://www.nasdaq.com/) Composite as internet valuations collapsed. The **2007–2009 Global Financial Crisis** bear cut the S&P 500 by 57% from October 2007 to March 2009 amid the housing crash and Lehman bankruptcy. The **2020 COVID bear** was the fastest in history — a 34% drop in just 33 days — and the **2022 inflation bear** dragged the index down 25% as the Fed raised rates at the most aggressive pace since the early 1980s. ## How Investor Strategy Differs Between Bulls and Bears Knowing the regime is one thing; trading it is another. The classic shift between bulls and bears shows up in **asset allocation** and **sector rotation**. In a bull, investors lean **risk-on**: overweight [equities](/blog/what-is-equities), tilt toward small caps, growth, and cyclicals (technology, consumer discretionary, industrials, financials). High-yield bonds outperform Treasuries. Cash is treated as drag. The mantra is "buy the dip." In a bear, investors flip to **risk-off**: raise cash, lengthen Treasury duration, rotate into defensive sectors (consumer staples, utilities, healthcare) and quality factors (low debt, high [free cash flow](/blog/cashflow-free), durable margins). Gold and the U.S. dollar often catch a bid as safe havens. The mantra is "sell the rip." Disciplined long-term investors do something different from both: they rebalance. When stocks rally hard in a bull, they trim back to target weights. When stocks crash in a bear, they buy back up to target. This forces a buy-low/sell-high reflex that emotion otherwise overrides. Dollar-cost averaging works especially well across bear markets, accumulating shares at depressed prices that compound on the recovery. ## Bulls vs Bears Beyond Stocks The vocabulary travels. **Bond traders** speak of bull steepeners and bear flatteners in the yield curve. A bond bull market means falling yields and rising prices — the great 40-year bond bull from 1981 to 2020 saw the 10-year Treasury yield drop from over 15% to under 1%. A bond bear, like 2022, brings the opposite. In **crypto**, the 20% rule gets stretched. Bitcoin routinely swings 20% in a week, so traders use deeper thresholds. The 2018 crypto winter saw Bitcoin fall about 84% from its 2017 high. The 2022 winter took it down roughly 77%. The bull runs in between were equally extreme. In **[commodities](/blog/what-are-the-commodities) and currencies**, "bull" and "bear" describe directional regimes too. A bull market in oil lifted crude from $20 in 2020 to $120 in 2022. A bear in the dollar (DXY) means the greenback is weakening against a basket of major currencies. Same animals, same psychology, different asset. ## Sentiment Indicators: Reading the Crowd Because bulls vs bears is partly a story about psychology, traders watch sentiment gauges to spot extremes. Three are core to most strategist toolkits. ![Bull and bear regimes map to distinct combinations of price trend and investor sentiment.](data:image/svg+xml,%3Csvg%20xmlns%3D%22http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg%22%20viewBox%3D%220%200%20720%20480%22%20width%3D%22720%22%20height%3D%22480%22%20role%3D%22img%22%3E%3Ctitle%3EQuadrant%20matrix%3C%2Ftitle%3E%3Crect%20width%3D%22100%25%22%20height%3D%22100%25%22%20fill%3D%22%23f8fafc%22%2F%3E%3Crect%20x%3D%2290%22%20y%3D%2225%22%20width%3D%22300%22%20height%3D%22190%22%20fill%3D%22%23dbeafe%22%2F%3E%3Crect%20x%3D%22390%22%20y%3D%2225%22%20width%3D%22300%22%20height%3D%22190%22%20fill%3D%22%23d1fae5%22%2F%3E%3Crect%20x%3D%2290%22%20y%3D%22215%22%20width%3D%22300%22%20height%3D%22190%22%20fill%3D%22%23ffedd5%22%2F%3E%3Crect%20x%3D%22390%22%20y%3D%22215%22%20width%3D%22300%22%20height%3D%22190%22%20fill%3D%22%23ede9fe%22%2F%3E%3Cline%20x1%3D%2290%22%20y1%3D%22215%22%20x2%3D%22690%22%20y2%3D%22215%22%20stroke%3D%22%2364748b%22%20stroke-width%3D%222%22%2F%3E%3Cline%20x1%3D%22390%22%20y1%3D%2225%22%20x2%3D%22390%22%20y2%3D%22405%22%20stroke%3D%22%2364748b%22%20stroke-width%3D%222%22%2F%3E%3Ctext%20x%3D%22240%22%20y%3D%22100%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2213%22%20font-weight%3D%22700%22%20fill%3D%22%230f172a%22%3EEarly%20Bull%3C%2Ftext%3E%3Ctext%20x%3D%22240%22%20y%3D%22120%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2210%22%20fill%3D%22%2364748b%22%3E%E2%80%A2%20Fear%20lingers%3C%2Ftext%3E%3Ctext%20x%3D%22240%22%20y%3D%22136%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2210%22%20fill%3D%22%2364748b%22%3E%E2%80%A2%20Prices%20recovering%3C%2Ftext%3E%3Ctext%20x%3D%22540%22%20y%3D%22100%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2213%22%20font-weight%3D%22700%22%20fill%3D%22%230f172a%22%3ELate%20Bull%3C%2Ftext%3E%3Ctext%20x%3D%22540%22%20y%3D%22120%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2210%22%20fill%3D%22%2364748b%22%3E%E2%80%A2%20Euphoria%3C%2Ftext%3E%3Ctext%20x%3D%22540%22%20y%3D%22136%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2210%22%20fill%3D%22%2364748b%22%3E%E2%80%A2%20Melt-up%20risk%3C%2Ftext%3E%3Ctext%20x%3D%22240%22%20y%3D%22290%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2213%22%20font-weight%3D%22700%22%20fill%3D%22%230f172a%22%3EDeep%20Bear%3C%2Ftext%3E%3Ctext%20x%3D%22240%22%20y%3D%22310%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2210%22%20fill%3D%22%2364748b%22%3E%E2%80%A2%20Panic%20selling%3C%2Ftext%3E%3Ctext%20x%3D%22240%22%20y%3D%22326%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2210%22%20fill%3D%22%2364748b%22%3E%E2%80%A2%20Capitulation%3C%2Ftext%3E%3Ctext%20x%3D%22540%22%20y%3D%22290%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2213%22%20font-weight%3D%22700%22%20fill%3D%22%230f172a%22%3EBear%20Trap%3C%2Ftext%3E%3Ctext%20x%3D%22540%22%20y%3D%22310%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2210%22%20fill%3D%22%2364748b%22%3E%E2%80%A2%20False%20rally%3C%2Ftext%3E%3Ctext%20x%3D%22540%22%20y%3D%22326%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2210%22%20fill%3D%22%2364748b%22%3E%E2%80%A2%20Shorts%20squeezed%3C%2Ftext%3E%3Ctext%20x%3D%2290%22%20y%3D%22425%22%20text-anchor%3D%22start%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2211%22%20fill%3D%22%2364748b%22%3EBearish%20Sentiment%3C%2Ftext%3E%3Ctext%20x%3D%22690%22%20y%3D%22425%22%20text-anchor%3D%22end%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2211%22%20fill%3D%22%2364748b%22%3EBullish%20Sentiment%3C%2Ftext%3E%3Ctext%20x%3D%22390%22%20y%3D%22453%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2212%22%20font-weight%3D%22600%22%20fill%3D%22%230f172a%22%3ESentiment%3C%2Ftext%3E%3Ctext%20x%3D%2280%22%20y%3D%2237%22%20text-anchor%3D%22end%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2211%22%20fill%3D%22%2364748b%22%3ERising%20Prices%3C%2Ftext%3E%3Ctext%20x%3D%2280%22%20y%3D%22405%22%20text-anchor%3D%22end%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2211%22%20fill%3D%22%2364748b%22%3EFalling%20Prices%3C%2Ftext%3E%3Ctext%20x%3D%2235%22%20y%3D%22215%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2212%22%20font-weight%3D%22600%22%20fill%3D%22%230f172a%22%20transform%3D%22rotate%28-90%2035%20215%29%22%3EPrice%20Trend%3C%2Ftext%3E%3C%2Fsvg%3E) *Bull and bear regimes map to distinct combinations of price trend and investor sentiment.* The **AAII Sentiment Survey**, published weekly since 1987, asks individual investors whether they are bullish, bearish, or neutral over the next six months. Readings above 50% bullish or below 25% are statistical extremes. Counterintuitively, extreme bullishness often precedes pullbacks, and extreme bearishness often marks bottoms — the survey is a contrarian indicator. The **CNN Fear & Greed Index** combines seven inputs (momentum, breadth, put/call ratios, junk-bond demand, market volatility, safe-haven demand, and stock-price strength) into a 0–100 score. Readings under 25 signal "extreme fear"; over 75 signals "extreme greed." Buffett's old line — "be fearful when others are greedy, and greedy when others are fearful" — is essentially a Fear & Greed Index instruction. The **VIX**, the CBOE Volatility Index, measures expected 30-day S&P 500 volatility implied by options prices. It is nicknamed the "fear gauge." A VIX under 15 signals complacency typical of late bulls; a VIX above 30 signals stress typical of bears. The all-time intraday high was 89.5 during the 2008 crisis. Other watched gauges include the **put/call ratio**, which rises when traders rush to buy downside protection, and **margin debt** levels reported monthly by [FINRA](https://www.finra.org/). Spikes in margin debt often coincide with bull-market tops, as leverage stretches the rally to its breaking point. ## Bulls vs Bears in the Language of Wall Street The animal vocabulary saturates how analysts, traders, and the financial press talk about almost every asset. Knowing the dialect makes earnings calls and research notes much easier to read. A **bull** is an investor who expects prices to rise; the adjective is **bullish**. A **bear** expects prices to fall; the adjective is **bearish**. Sell-side analysts publish "bull case" and "bear case" price targets alongside their base case, framing the upside scenario, the downside scenario, and the most likely path. A **[bull trap](/blog/bull-traps)** is a false breakout that suckers buyers in before reversing; a **bear trap** is the opposite — a fake breakdown that shakes out shorts before the real rally. Traders also speak of **secular** versus **cyclical** trends. A secular bull or bear plays out over a decade or longer, driven by structural forces like demographics, productivity, or interest-rate regimes. A cyclical bull or bear lives inside a secular trend and runs months to a few years. The 2020 COVID crash was a violent cyclical bear inside the longer secular bull that began in 2009. ## Conclusion Five things to take away from this walk through bulls vs bears: - A **bull market** is a 20% rise from a recent low; a **bear market** is a 20% drop from a recent peak. Anything in between is a pullback or correction. - The terms come from how each animal attacks — bulls thrust up, bears swipe down — with possible roots in 18th-century London bearskin jobbers. - Bulls run longer (about 5 years on average); bears bite faster (9–14 months) but cut deeper. - Strategy shifts with the regime: risk-on, cyclicals, and growth in bulls; risk-off, defensives, and quality in bears. - Sentiment indicators like the AAII survey, CNN Fear & Greed Index, and VIX help spot the extremes — usually as contrarian signals. Markets will keep cycling between these two animals for as long as humans price assets. The next bull and the next bear are already on the calendar; only the timing is unknown. What matters is having a plan that works in both, not a guess about which comes next. Ready to put this knowledge to work? Try Warren, your AI financial advisor — get personalized, conflict-free guidance at heywarren.com --- ## Related Reading **More from Warren**: **Authoritative sources**: - [SEC Investor.gov — Investing Basics](https://www.investor.gov/introduction-investing/investing-basics) - [FINRA — Investor Education](https://www.finra.org/investors)