Market phases refer to the distinct stages that financial markets go through over time, typically categorized as bull markets and bear markets. A bull market is characterized by rising prices and investor optimism, often leading to increased buying activity. In contrast, a bear market features declining prices and widespread pessimism, resulting in more selling and caution among investors. These phases can also include transitional periods, such as market corrections, where prices temporarily decline within a broader uptrend, or consolidation, where prices stabilize after significant movements. Understanding these phases helps investors make informed decisions based on market trends.