What moves the stock market in certain directions?

The above question has no definite answer, as the stock market is very volatile and very difficult to foretell. Some moves of the stock market are expected and obvious but some moves of stocks catch everyone by surprise. The stock market is directly related to the social, economical and the political situation of any country and the changes (bull market conditions and bear market conditions) are a result of the above said situations. The stock market may see a slowdown or a speed up depending upon the overall situation in the country. The stock market is also influenced by the world economy and certainly is influenced by changes that happen internationally.

Our stock market is strongly influenced by inflation, earnings, the interest rates, energy and oil prices, war/ terrorism, fraud and crime rate, political unrest, weather conditions and overall domestic development. Some of the above conditions are not quite serious and can be considered as temporary problems but some like crude prices, political deadlock and slow economy have long lasting implications which is bad news for the stock market.

One factor that cannot be discounted in the stock market is the term “uncertainty”. This is one word that can pull or push the market and can also bring the market crashing down. People speculate over a certain situation and this speculation can shake the stock market.. If the factors are in line with speculation then the market sees very little change but if the news is reverse to the speculation then there is an abrupt change with rattles most investors.

Economic news, financial news and terrorism bring market to a standstill but if the news is sweet enough for the investor to digest then the market surges forward. Investors need not be frightened of sudden bumps, as they will smoothen over time and only make the investor more scared. Investors should stay alert and grab opportunities when the market goes into the red. Over-priced stocks should be eyed and if it does cross your range pick it up, and if the stocks cross your limit and expectation due to surge then book profits immediately.

When you want to sell stocks of large volume then it makes sense to watch out for earnings report or the budget or any other important meeting that could raise the price of that particular stock. When the bull market is at its highest speed, it is the right time to sell and save a little for tomorrow.