What is a kangaroo market?

By Morningstar |  30-06-20 | 

Over the medium term, the stock market tends to follow a particular trend.

A bull market sees stock prices on an upswing; a bear market sees it rapidly declining. A bear market is a sustained market correction, where the indices decline by at least 20% over two months.

It is given to understand that a kangaroo market is one where stock prices swing up and dive down rather rapidly, without any news being the apparent trigger. The frequent bounces and falls culminate in a lack of direction.

Bear markets are rife with pessimism, negative sentiment and fear.

Bull markets have everyone doing a song and a dance, and can be characterised by recklessness and greed.

The kangaroo market probably evokes confusion and frustration.

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