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Opinion
Barry Ritholtz

Bulls and Bears in Role Reversal

After large gains in the stock market, bulls and bears seems to have switched places -- bulls are pessimistic, while bears act as if they have been vindicated. 
These two haven't fought to a draw for five years. Photographer: Krisztian Bocsi/Bloomberg
These two haven't fought to a draw for five years. Photographer: Krisztian Bocsi/Bloomberg

"Capitulation" is the term used to define a selling climax that often marks the bottom of a bear market. It translates into "surrender" -- giving in to the overwhelming need to just make the pain stop. Retail brokers tell tales of individuals bailing out, often saying things like, "Just sell, get me out, please make it go away."

We also can see capitulation at a market top, where bears throw in the towel, finally flipping bullish after missing out on too many gains.