The slang term “market is up” refers to a financial market that is trending upwards, indicating a rise in values. Securities indexes are commonly used as a reference to determine the current direction of trading. For example, the Dow Jones Industrial Average is a popular tool for assessing economic health in the United States, and changes in the value of the Dow may be used as market indicators. Investors pay close attention to market movements in order to make sound decisions about purchases.
By contrast, when the market is off, it means that prices are falling and investors could be at risk of taking losses. People may also refer to the market being “down,” showing falls in the value of stock indices and other measures. Over the course of a day, the market may trend up and down several times in response to trading activity sparked by political events, announcements from major companies, and other factors. This can be a particular concern for investors in short term positions who may be worried about losses.
When the market is up, it can be a good time to buy some securities, in order to be able to resell at a higher price later. Futures contracts can also be established in an up market to generate earnings for investors; people may bet on a rise in prices, for example, to lock in a low price on an option so they can buy a stock at a contractually obligated low price later, when the value is even higher. Down markets can also be worked to the advantage of investors, if they are familiar with trends and can take strategic positions for future benefits.
In financial reporting, numerous updates may be provided over the day to keep people apprised of events in the market. Updates may open with a discussion about whether the market is up or down, as this information can be important to have. After markets close, reporters can discuss whether the net trend in fact went up or down, and may note if rallies occurred. In a rally, prices fall and then rise again, indicating a rise in investor confidence and a flurry of trading activity to stimulate another upward trend.
Investors can run into trouble when the market is up. Predictions about market trends can be incorrect, and assuming that prices may continue to rise may lead someone to execute a bad trade. For example, someone could buy real estate on the grounds that it will appreciate in value and be resalable at a high price in the future because the market is up, only to find that values actually fall. The investor might be left with a home “under water,” which means that the loan on the home is worth more than it could be sold for on the open market.