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Most traders think a bull market means bigger moves.
More action. More volatility. More opportunity.
But here’s something that’ll probably surprise you: Bull markets actually make the market move slower.
The biggest difference between a bull market and a bear market isn’t direction — it’s how much range there is.
If you look at the S&P 500 (SPY) when it’s above the 200-day moving average versus below it, the odds that the next day is green or red are roughly the same.
Being in a bullish trend doesn’t automatically give you higher odds of a green day.
Don’t take my word for it. Run the analysis yourself over the past 20 years and compare the results.
In one sample of 593 sessions, the average closing move was about 0.42%. Statistics like that help establish a realistic baseline for market movement instead of relying on assumptions about what a bullish market should do.
What Really Changes in a Bull Market
When SPY is above the 200-day moving average, it tends to produce smaller average true ranges and lower Cboe Volatility Index (VIX) readings than when it’s below.
In other words, bull markets often compress volatility. The moves get tighter, the swings get smaller and the market grinds higher in a more controlled way.
Below the 200-day moving average, the expectation that the next session will move much more is significantly higher. You tend to see wider ranges, bigger swings and more uncertainty.
VIX adds another layer of context. The 200-day moving average helps identify the broader market regime, while VIX shows how much near-term volatility options traders expect.
Watching both can give you a clearer picture than relying on either indicator alone.
Why Market Structure Matters
The kind of market you’re in will dictate, as much as anything, how you can trade.
In a bullish environment, don’t chase massive daily moves that may never arrive. Think about tighter targets, steadier trends and strategies built for lower volatility.
If SPY falls below the 200-day moving average while VIX rises, adjust accordingly. Wider ranges may require smaller position sizes, more room for stops and greater patience.
There is one caveat: Transition periods can get messy. When the market is shifting from one regime to another, historical averages may not apply perfectly.
But the core principle holds: Above the 200-day moving average generally means smaller moves, while below it generally means bigger moves.
So when planning your trades, don’t just ask whether the market is going up or down.
Identify the market structure, check expected volatility and build your strategy around the movement that’s actually likely.
Now don’t forget to join us at 10:30 a.m. ET weekdays for Opening Playbook, and at 3:30 p.m. ET Closing Playbook!
Nate Tucci
Tucci Trades
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
