What Is a Bull Market?
Michael Whitman
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Trading since 2017, full-time since 2020
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YouTube creator, 137K subscribers
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Published 2026-09-14
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Updated
Bull market is the conventional label for a sustained rise, usually a gain of twenty percent or more from a recent low. The threshold is a convention rather than a measurement, and the label can only be applied after the move it describes has already occurred.
A bull market is a description of something that already happened, phrased as though it were a condition you are currently inside. That distinction is the whole of what is worth knowing about the term.
How it works
The conventional threshold is a 20% rise from a recent low. Cross it and the period gets the label, retroactively, back to the low it started from.
The number is arbitrary. It matches the bear-market threshold for symmetry and has no basis in measured market behavior. Nineteen percent and twenty-one percent are different labels and the same event.
And it is applied backwards. The starting point is the low, which is only identifiable once price has moved far enough away from it — so the label always arrives late by exactly the size of the threshold.
Why it carries no actionable information
A trader holding through a bull market sits through almost as many down days as up ones. Across the S&P 500’s long climb from 1950 to 2026, 53.1% of trading days closed higher — a sustained rise built from days that are close to a coin flip, and the market does not know it is in one.
So “we are in a bull market” says the last stretch went up. It contains no statement about the next bar, and the daily split above is the reason: any edge in direction is slight and unevenly distributed.
Longer windows tilt further, but not by much. Over ten-day windows the index finished higher 59% of the time, and that tilt held whether or not anyone was calling the market a bull at the time. It is a statement about the index’s long drift — not about labels.
A worked example
Suppose an index falls 30%, then rises 25% from the low.
Has a bull market started? By the convention, yes — 25% exceeds the threshold. And the index is still about 12% below where it began.
So a portfolio can be in a bull market and underwater simultaneously. The label measures distance from the low; your position measures distance from what you paid. Those are different questions and only one of them is yours.
Even the S&P 500, which rose enormously from 1950 to 2026, closed below its prior record on 93% of trading days. The label and the experience routinely disagree, and the experience is what governs whether people hold on.
The one useful reading
As a description of regime, not a forecast. Knowing that the recent past has been broadly rising is genuine context — it changes how a pullback should be interpreted and how much confidence a long position deserves.
As a caution about sizing. Extended rises are where risk tolerance quietly expands, because recent losses have been small and recoveries fast. The size chosen in that environment is the size carried into the next decline.
And as a reminder that it ends without notice. There is no announcement, and the top is identifiable only from a distance.
The original data
Of the 24,971 trading and investing videos measured for this site, 7 have “bull market” in the title, from 7 channels, at a median of 3,758 views.
The index’s own record shows how thin the label is as a forecast. From 1950 to 2026 the S&P 500 finished higher over 59% of ten-day windows, across bull and bear labels alike, so a forecast built on the name of the regime has to beat a base rate that was already tilted upward without it.
Secular and cyclical
A distinction worth having is between long and short versions. A secular bull market runs for a decade or more and contains several declines inside it; a cyclical one runs for months or a couple of years and sits inside a larger structure that may point the other way.
Both get called bull markets, which is where a great deal of confusion comes from — two people can disagree entirely while both being correct about different timeframes.
Neither is identifiable in advance. The secular label in particular is applied with decades of hindsight, which makes it excellent history and useless for a decision made today.
The practical version is to fix your horizon first. Decide whether the question is about the next year or the next twenty, then read the structure at that scale and accept that the other scale may disagree. Choosing the timeframe after seeing which one supports the position you want is how the label gets used to justify rather than to inform.
How this connects
A correction inside a rise does not end the label by convention, which is why a market can be in a bull market and in a correction at the same time.
Its mirror image is the bear market rally, a sharp rise inside a decline that looks like the start of a new bull market and then fails.
Traders describe the same thing structurally. Each higher high followed by a higher low confirms the rise swing by swing, with far less delay than a threshold measured from the bottom.
Trend following is the approach that profits from long rises without needing the name, because it reacts to price rather than to the label.
A golden cross is the moving average version of the label, and it shares the lag: two averages crossing only confirm a rise that has already happened.
Momentum trading lives inside these stretches, and short run lengths are why momentum approaches rotate between names rather than holding one for the whole advance.
And a short squeeze can add a burst to a rise when sellers are forced to buy back, which says a great deal about positioning and nothing about how long the rise lasts.
When it fails
The characteristic failure is increasing size because the label is favorable. An extended rise makes losses feel small and brief, risk tolerance expands to match the recent past, and position sizes grow into an environment that has been unusually forgiving. The label did not cause this and it supplies the justification for it. When the conditions change — with no announcement and no threshold crossed until long afterwards — the sizing set by the good period is the sizing carried into the bad one.
A second failure is treating the label as a timing signal. It is applied retrospectively and says nothing about duration.
A third is confusing being in a bull market with being profitable, which the 30%-down-25%-up example separates.
A fourth is expecting a symmetric ending. Rises tend to be gradual and declines abrupt, so the exit is rarely as orderly as the entry.
The question: Up twenty percent. How much is left?
And a fifth is assuming everything rises together. An index can advance on a handful of names while most constituents fall, which breadth measures and the index price hides.
Related
Bear market covers the mirror label and the recovery arithmetic. Market trend covers the structural definition and real run lengths. And breakout covers what a continuation claim has to show before it is worth acting on.
Bull markets are identified in retrospect and discussed as though they were a current state. By the time something has risen enough to earn the name, the rise that earned it is already in the price — which does not mean sell, it means the label contains no information you can act on.
— Michael Whitman
This page is educational, not financial advice. Test every idea on your own charts before risking money.