Bear Market Rallies

A Bear Market Rally refers to a sharp, short-term price increase in a stock or market amidst a long-term bear market period. Typically indicated by a 10-20% drop in the market from recent highs, it is characterized by a protracted downward trend in which equities stage a short-term revival. A bear market rally can be considered good at first, but it can also be risky for investors who buy stocks, thinking that things will improve over time. Notable bear market rallies occurred during the stock market crash in the Dow Jones Industrial Average in 1929 all the way to the market bottom in 1932, and in the late 1960s until the early 1970s.