Wolf Market – A Brief Definition

By H. Keith Thompson 

Over the past several decades, we have all become familiar with the terms bull market and bear market as it relates to the stock market in general. If the stock market is rising, it is referred to as a bull market and if the stock market is in decline, it is referred to as a bear market. Bulls charge and bears hibernate or hide.

Ever heard of the term wolf market? A wolf market is defined as any two consecutive, 10%+ downward corrections with no increase in price from the trough of the first correction to the trough of the second correction. That is what we have today. No one seriously saw the past five weeks coming.

Wolf markets are characterized by volatile/sideways stock prices. My simplistic viewpoint on the differences is that you can hear bulls and bears running toward you, but a wolf sneaks up quietly and all you hear is its growl before it attacks.

In my opinion, within the past 25 years we have only had one other true wolf market, and that was after 9/11. It was tragic and many people lost their lives and its memory will forever live with each of us. Economically, because it happened so suddenly, quickly and deeply, markets were able to come back at almost the same inverted curve as it went down. While this is our hope for this wolf market, the reality is, it could take three to five years to climb back to 2019 value levels.

H. Keith Thompson is principal, Avison Young Hospitality Group.

This is a contributed piece to Hotel Business, authored by an industry professional. The thoughts expressed are the perspective of the bylined individual.

1 Comment

  1. Thanks for referring to the definition of the Wolf Market used in my June 2019 Journal of Financial Planning article entitled “Can We Better Understand Markets with a Four-Environment Perspective?”. For any of your readers that have a further interest in this subject, please use this link to my full research whitepaper on the subject: https://www.4tfg.com/bear-bull-wolf-eagle-markets