The three market states

A market or stock is usually defined as being in one of three states:

1 Bullish: Price behavior trending up 1 Bearish: Price behavior trending down 1 Range bound: No discernable trend

Deciding which of the three states a market is in can be as easy as looking back a few weeks on a chart and spotting a general direction or drawing a line that shows the market's trend. It may also be as complicated as using a technical indicator to reveal the direction of the market. These indicators are covered extensively in Chapter 11, but for this chapter, I use examples where the market trend is easy to decipher.

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