Why does the bull market rise slowly and then fall sharply (Part 1)
In a bull market, why do there always appear to be slow rises and sharp falls? When it rises, it slowly reaches a new high, but when it falls, it always plummets? This is because in a bull market, many people do not think it is a bull market. The so-called bull market needs to rise a lot, such as the market doubling, reaching a record high, and a large number of stocks rising five to ten times, before everyone recognizes it as a bull market. During the formation of the bull market itself, everyone was skeptical. However, the trend of the bull market has been formed invisibly. There is a continuous flow of incremental funds entering the market, which will push the stock market up every day. Even if it rises and dives in the morning and falls in the afternoon, funds will enter the market in the last half hour, thus The result is that no matter how much the market swings, it will eventually rise. This is also the order dominated by bulls after the long-short game throughout the day.
This will inevitably mean that the daily increase will not be too large. After all, there are long and short differences every day. Even if there is a negative, the market can quickly digest the negative, and even interpret the negative as a positive. So with so many factors, Under the game, it will form that although it rises every day, the increase is more or less, sometimes it rises greatly for a day, and then it rises slightly for a few days.
This process will form a lot of profit-taking, and many investors actually do not have a firm bull market mentality. They just want to speculate and run when the price peaks. Therefore, when the stock market suddenly fell one day, it did not pull up. This will induce a large number of speculators and bull market doubters to sell stocks together, leading to a plummeting trend.
