The markets are governed by two overarching macrotrends: major uptrends and major downtrends.

Most markets—as with the broader economy—rise in a jagged pattern for extended periods of time that can last years (major uptrend), then fall irregularly for another extended period of time (major downtrend).

A major uptrend can last from several weeks to several months and is otherwise known as a "bull market." The converse is true for a major downward, or "bear market." These movements are distinct from daily movements and other short-term price fluctuations.

A major uptrend is defined as continuing as long as each successive advance of the primary trend peaks higher than the one preceding it. A bear market is defined as one in which each successive decline carries the market to new lows.

A major uptrend is characterized by rising prices and growing optimism. Likewise, falling prices and growing pessimism characterize a major downtrend.

Within a major uptrend or downtrend, several secondary reactions occur against the trend, lasting for a few days, weeks or even months, but they don't necessarily change the definition of the overall trend.

In the stock market, for example, prices may drop precipitously, even during a powerful uptrend, for several weeks at a time. This is known as a "correction." If the uptrend is still in place, a rally will then ensure.

If a rally movement doesn’t succeed in breaking through the previous high and the market subsequently declines to fall below a previous low, the movement has switched from a major uptrend to a major downtrend.

It is difficult (some would argue impossible) for investors to precisely time major uptrends and major downtrends. That's because markets often rise higher than most investors and analysts anticipate—and sometimes fall lower than they could possibly fathom.

That's why investors are counseled to never bet against a major uptrend or downtrend. These respective trends can last for long periods of time. As a rule, investors should not stubbornly buck the trend, which is akin to swimming against the tide.

The key for investors is to either step to the sidelines, or pinpoint stocks that perform well in a major uptrend or downtrend when one is occurring.