Sunday, 17 July 2011

Bull Market, Bear Market - Why Do We Use Those Terms?

I've been wondering about the origins of the usage of those terms.

Wikipedia has some ideas, or dare I say, speculations:

The precise origin of the phrases "bull market" and "bear market" are obscure. The Oxford English Dictionary cites an 1891 use of the term "bull market". In French "bulle spĂ©culative" refers to a speculative market bubble. The Online Etymology Dictionary relates the word "bull" to "inflate, swell", and dates its stock market connotation to 1714.
The fighting styles of both animals may have a major impact on the names. When a bull fights it swipes its horns up; when a bear fights it swipes down on its opponents with its paws. When the market is going up, it is similar to a bull swiping up with its horns. When the market is going down it is similar to a bear swinging its paws down.
One hypothetical etymology points to London bearskin "jobbers" (market makers), who would sell bearskins before the bears had actually been caught in contradiction of the proverb ne vendez pas la peau de l'ours avant de l’avoir tuĂ© ("don't sell the bearskin before you've killed the bear")—an admonition against over-optimism. By the time of the South Sea Bubble of 1721, the bear was also associated with short selling; jobbers would sell bearskins they did not own in anticipation of falling prices, which would enable them to buy them later for an additional profit.
Another plausible origin is from the word "bulla" which means bill, or contract. When a market is rising, holders of contracts for future delivery of a commodity see the value of their contract increase. However in a falling market, the counterparties—the "bearers" of the commodity to be delivered—win because they have locked in a future delivery price that is higher than the current price.

AUD/JPY Weekly Chart Trend Line Tested

As I was looking at the USD/JPY charts yesterday, I thought why not have a look at the AUD/JPY too. Others have observed that the AUD/JPY has been closely correlated to the ASX 200. Worth keeping that in mind, I think.

Watch for a break of last week's lows. Remember that last week's lows are also key for the ASX 200

Currencies Daily Charts Wrap

EUR/USD looks to have tested and rejected the trend line. The moving averages indicate that the trend is down at this time frame.

The Aussie continues to trade broadly sideways, and that'll be how I view it til either of the nearby trend lines is broken.
The GBP/USD is testing the neckline again.

USD/JPY, same chart as I posted yesterday, testing the channel line.

Gold and Silver Daily Charts

Gold is testing the parallel trend line for the first time. None of the other lines was broken on the first test. Anything can happen.

Silver has moved broadly sideways since mid-May.

Global Stocks Weekly Charts Wrap

Several stock markets tested support levels or trend lines last week. Therefore any move below last week's lows for those markets would signal or confirm likely new trends. The five that jump out to my eyes are the Australian ASX 200, China H-shares index, Japanese Nikkei, UK FTSE 100, and German DAX 30. It's worth reviewing the other markets also, so I've posted the lot.

S&P 500.
ASX SPI 200. Testing support.

China H-shares. Testing support. The break of the parallel trend line in 2008 turned out to be spectacular.

India Nifty 50.

Nikkei. Trend line test.

FTSE 100. Testing the trend line again.

German DAX 30. Looks like a wedge and a completed throw over to me. A move between last week's lows could be spectacular.