Bull markets begin at a time when the economy seems to be getting worse. The beginning of a bull market, or market bottom, is almost always associated with low investor expectations. A bull market tends to be associated with increasing investor confidence, which spurs investors to buy in anticipation of future stock price increases and capital gains. In describing financial market behavior, the largest group of market participants is often referred to as a herd. This is especially relevant to investors in bull markets since bulls by nature are herding animals. A bull market is also sometimes also referred to as a bull run. Dow Theory is one example of technical analysis that attempts to describe the character of these market movements.
A stunning example of a raging bull market was India's Bombay Stock Exchange Index, which was in a bull run for almost five years from April 2003 to January 2008 as it increased from 2,900 points to 21,000 points. The Internet and Housing Bubbles in the United States are further examples of the amazing power of herd behavior in bull markets.
In a bull market, investors 'go long', meaning they buy and hold stocks for longer periods of time to benefit from the rising prices of the bull market. It is important to sell the stocks near the highs of the trend, which are usually associated with parabolic curve patterns and blowoff top behavior where prices increase extremly fast and at a pace that cannot be sustainted.