Tactical Investing: The Winning Combination of Mass Psychology and Technical Analysis
Tactical investing is a process that combines the principles of mass psychology and technical analysis to help investors make informed, strategic decisions. By seamlessly blending these two approaches, the Tactical Investor can get on the right side of the market and make strategic decisions more likely to yield positive results. This convergence of mass psychology and technical analysis is at the heart of the Tactical investing approach and sets it apart from other investment strategies.
Emotions play a significant role in driving market trends and influencing investment decisions, even if many traders prefer to deny this fact. Mass psychology involves identifying the emotional state of the market and using this information to predict trends and make informed investment decisions. By identifying the emotional drivers behind market movements, we can get ahead of the game and enter investments before they take off. Technical analysis also plays a role in this process by helping us to fine-tune our entry points and get into a given investment at the most favourable price. Together, these strategies can help us make informed, strategic decisions more likely to yield positive results.
The daily charts are close to trading in the extremely oversold ranges. Hence an interim bottom is likely. The ideal scenario calls for them to rally to the 29 to 30 of this month and then drop lower into January 2023. Market Update Forum Dec 20, 2022
The easy trade is over; yesterday’s action partially confirms it. This does not mean that markets can’t run higher; it simply implies that you will need to work harder for your coin from here onwards. In other words, volatility levels will surge. Dec 4th update, 2022
The Dow managed to end the week above a key short-term zone of resistance (32,250); by closing above this level on a weekly basis, it has set the path for a test of the 34,300 to 34,650 range. Market update October 31, 2022
Short term, the markets are entering a corrective phase; the SPX has hit short-term targets. Former support points turned into resistance which should turn into zones of support again, albeit on a short-term basis. The likely pullback targets fall in the 3960 to 4020 with a decent chance of overshooting as low as 3870. Market Update August 2, 2022
The media works hand in glove with central bankers, so the masses stand no chance. Investigative journalism is a thing of the past. The only investigation being done now is to determine which headline will fetch the most eyeballs. If you understand that, then no one in their right mind can or should trust what 96% of the media pushes. Market Update June 18 2021
Investors have buried a considerable sum of money into money markets, and the return is horrible, to say the least. While the Fed might intervene, our original prediction that individuals seeking safety will be fried and forced to speculate sooner than later is coming to pass. Eventually, all this money will start pouring into stocks as there won’t be any other alternatives. This will provide even more fuel to the current rally. Central bankers are in a race to debase their currencies, with the goal being to finish last if possible. The US is best equipped to win this game, for it dominates on three crucial frontiers. Strongest Army in the world, World reserve currency status and almost total domination in the AI sector. Market Update June 3, 2021
What about the “it’s different” this time argument? Rubbish!! that is all we have to say to anyone coming up with that line. Look at the above chart. Can you even pinpoint the great depression or the so-called deadly crash of 1987? Every crash gave birth to a new baby bull. The key to banking vast sums of money is always to have some cash at hand and, most importantly, never over-commit funds to a single position. As long as the trend is on our side, we have to view every pullback through a bullish lens. Market Update May 12, 2021
If the MACDs complete the bullish crossover at this level, it will create a pattern that usually results in a fast upward move. The Nasdaq could then very easily trade to the 14,500 range with a possible overshoot to 15,000. After that, it could shed up to 2000 points before building up energy to challenge 18,000 ranges. Market Update April 30th, 2021
If the trend is up, no matter how sharply the markets pull back, do not panic, even if every expert and his grandma are telling you it’s time to flee for the hills. Market Update March 11, 2021
It is relatively easy to make money in the markets once you have mastered the art of patience and discipline. Failure to master these two skills will virtually guarantee a negative outcome. The reason most investors lose money is that they have no plan. When things look good, they jump in and vice versa. Now ask them what makes an investment look sound or great, and they will reward you with the proverbial idiotic answer “because the experts” said so. The simple, time-tested methodology that has never failed over the generations is that one should never buy when the masses are euphoric and vice versa. Market Update, Feb 14, 2021
It is quite likely now that the Nasdaq, which is leading the way up, will test the 14K plus ranges. The Nasdaq could end the week above 13390, and if it does, it is likely to trade to the above targets. We will issue some new plays today, but we are only going to get into extremely oversold stock, and we will only deploy 1/3rd of our funds at this stage. Market Update Jan 25, 2021
Many investors are stating they are itchy to jump into the markets; isn’t this bloody amazing? When the markets were crashing last year, and we were telling everyone to buy, they wanted to do the opposite. Now we are stating that it’s time to hold the gunpowder dry, and they want to move in the opposite direction again—a classic replay of the secret desire to lose syndrome in action. Misery loves company, and stupidity simply demands it. The average mindset is wired to lose, so when you feel sure about something, check ten times before you get into it. Certainty about the markets is probably the best signal that you will get hammered. Market Update Jan 11, 2021
No change in the Anxiety index, and there is a spike in the number of individuals in the neutral camp. This informs that a substantial percentage of traders don’t know what to do or what to expect from the markets, which is bloody good news. When the markets sell-off, the dumb money will be doing most of the selling while the smart money will be waiting for the fear levels to surge, and then they will come in and start buying. Market Update Dec 31, 2020
Most investors react to disasters by panicking and throwing the baby out with the bathwater; in recent times, they have thrown the babysitter and the entire family out too. Disaster is the code word for opportunity, especially when it comes to the financial markets. Lastly, remember how far the Dow has rallied off its low in March; the naysayers only focus on the pullbacks but not on the big upward moves the market experienced before the pullback, for if they did, it would shatter their already pathetic record. Market Update Nov 13, 2020
Neutral readings have more or less remained constant since the markets bottomed. What is worse than fear? Uncertainty. At least when you are fearful, you have something to focus on. When you are uncertain, you are like a Yo-Yo swinging from one side of the fence to the other. The longer the crowd remains sceptical, the higher this market will run. If we had to make what is sometimes referred to as an educated guess, it is all but certain that the Nasdaq will trade to and past 15K. Market Update Sept 30, 2020
Hence with false filters and twisted perceptions, one is creating a reality that does not exist, and in doing so, one has no hope of upgrading one’s operating system. Note that we all have operating systems to a degree. These operating systems determine how you process the data you take in; this is why one person can see opportunity while the other can only visualise danger. Market Update Sept 30, 2020
On the same token, the reason so many Magellan fund subscribers lost was that they were trying to outdo Lynch. They sold when the going got tough and purchased the fund when everything looked rosy, the perfect recipe for destruction. So, what can we gather from this? That no matter how good the fund managers are, stupidity trumps logic. Investors allow emotions to enter into the equation; the decision to buy is based on greed, and the decision to sell is based on fear. In essence, the odds of winning when employing such a strategy are virtually zero. Market Update Sept 20, 2020
The Dow has shed more than 1500 points from high to low. When a market sheds weight for three-plus days in a row without any real trigger, the next step is for the market to attempt to put in a bottom. Market Update Sept 9, 2020
As the Dow is all but guaranteed to take out 30K, traders willing to take on some risk could deploy extra funds in portions into DIA 300 calls (as high as 340 would be fine) whenever the Dow pulls back strongly. Every other index is now playing catch up to the Nasdaq; in a way, it’s sort of like the dogs of the dow theory, which inadvertently states that every dog will have its day in the sun. Another reason that the Dow is lagging and the Nasdaq is soaring is because the dumb money, which is the vast majority of players, is still sitting on the sidelines. Market Update Aug 11, 2020
Don’t fall for the sky is falling hype, for we have a Fed that is hell-bent on destroying anyone that dares to challenge them. You are going to see some big names get destroyed before this bull is over as these big names, in their infinite wisdom, will decide to take on the Fed, and as expected, the result is that they will end up dead, as in dead broke. Market Update July 12, 2020
Helicopter money is here, and nobody is complaining about it; in fact, they want more and more. It may seem surreal to those with some semblance of common sense left, but at this stage and for several years to come, nobody will give a damn about the national debt. Market update July 12, 2020
So, whatever rubbish they pump out in the news, this pullback will resolve itself sooner than later because the Fed and its allies will either come out with new policies to push more money into the markets or directly intervene by supporting the financial system. Market Update June 12, 2020
We could be in for a new era in terms of market moves, sharp down days followed by even sharper reversals. Hence, the overall theme should be to view every sharp pullback through a bullish lens. Interim market update June 6th, 2020
There has never been a period where bearish sentiment has remained negative for weeks on end while the markets continue to soar without letting out any steam. This insane intervention by the Fed also informs us that this bull will indeed soar to unimaginable heights. It could very well end up becoming the modern version of Tulip Mania. Market update May 31st, 2020
So, prepare yourself mentally to deal with sharp gyrations from time to time, for the rewards will be huge. We are now in a different market, and technical analysis, fundamental analysis, and any type of single analysis will fail. This is psychological warfare of the highest order. The order is to change the masses’ perception with a such subtleness that they will think and believe they arrived at a conclusion that was already chosen for them. Market Update May 31, 2020
It appears that markets are experiencing the “backbreaking correction” one, which every bull market experiences at least once and is often mistaken for the end of the bull. While it feels like the end of the world, such corrections always end with a massive reversal. Given the current overreaction to the coronavirus, there is now a 70% probability that when the Dow bottoms and reverses course; it could tack on 2200 to 3600 points within ten days. Central bankers are already talking about another version of shock and awe to boost the markets as they did back in 2009. https://yhoo.it/2W4r9GVAs we stated before, the goal is to lower interest rates and debase the currency; hence, one can expect many shock and awe programs. Interim Update March 9th, 2020
A sharp pullback is still an outcome we view through a very bullish lens. The ideal setup calls for the Dow to trade in the 28,800 to 29,000 range, with a possible overshoot to 29,300. After that, a nice sharp pullback would set the bedrock for a surge to and possibly well past 30k. Market Update Dec 29, 2019
We have a stunning development. The combined score of neutral and bearish sentiment has surged to 80, which is extremely telling. Consider that we are trading several 100 percentage points away from the 2009 lows and the masses are almost as scared as they were back in 2009. If the markets were to crash, it would be the first time in history a bull market ended on a note of uncertainty. History is never kind to the crowd, and we don’t think that picture will change in the near future. Market Update Oct 10, 2019
When the trend is positive (UP), train yourself to view strong pullbacks, corrections and other negative developments through a bullish lens. Anyone can panic in the face of trouble, but only astute individuals can stand still and direct their energy to spotting opportunities. Don’t do what the masses are trained to do, for, after all these years of panic, they have nothing to show for it. Market Update Sept 15, 2019
The Dow has now dipped below 27K (on a monthly basis). We see no reason to worry; investors should continue with their daily lives and focus on the things that make them smile or leave them peaceful. Remember, today’s news is nothing but weaponised propaganda and weaponized news is here to stay. Tactical Investing Market update July 31, 2019
To embrace the “trend player” methodology, one needs to clear one’s mind from all the nonsense injected via the Mass media. Secondly, change the way they used to trade, and lastly, they need to understand that it takes time. Depending on how open-minded one is, the average turnaround time falls in the 4-12 week range period. Remember that nothing good comes easy, and more importantly, this change will be permanent. One will know how to fish instead of always waiting for a handout. Tactical Investing Market Update July 24, 2019
Bitcoin is finally showing strength, it has managed to stay above 3900, and this suggests that a bottom could be in for the year. There is an active zone of resistance in the 5850-6150 ranges. If it can manage a monthly close above $6150, then it will be in a position to test the 6900-7200 ranges with an overshoot to the 7500-7740 ranges. Market Update May 7, 2019
In such an atmosphere, the main thing you should focus on is the trend; if the direction is up, then use pullbacks ranging from mild to wild to add to your long positions. Hence do not let panic enter the equation if the market experiences a minor or strong pullback unless the trend changes and the trend is showing no signs of breaking. With V readings in the super Ultra-high ranges, traders should be prepared and ready to deal with volatile market swings. Until the trend changes, those shorting the markets ask for trouble unless they are ready to move quickly. Market Update April 13, 2019
So far in 2019, the number of individuals in the neutral camp has always surpassed those in the bullish or bearish camps, and this is very revealing. It clearly indicates that the masses are suffering from a long-term bias and that the political landscape is messing with their ability to distinguish reality from fiction. Market Update March 31, 2019
This bull market is unlike any other. Before 2009, one could have relied on technical studies to more or less call the top of a market,. After 2009, the game plan changed, and 99% of these traders/experts failed to factor this into the equation. Technical analysis as a standalone tool would not work as well as did before 2009 and, in many cases, would lead to a faulty conclusion. Long story short, there are still too many people pessimistic (experts, your average Joe and everything in between). Until they start to embrace this market, most pullbacks ranging from mild to wild will falsely be mistaken for the big one. Market Update Feb 18, 2019
The trend is up and showing no signs of weakening. Therefore we must treat anything the media attempts to market as a disaster as an opportunity factor. The media is an extension of the mass mindset. For any con, you need at least two elements, a con artist and a bunch of idiots. An observer is not part of this equation, for he/she does not equate with the conman or the idiot. The observer’s function is to observe and then use the data to plot the most favourable path. Tactical Investing Market Update Feb 28, 2019
90% of advisers, experts, and financial commentators do not know what they are talking about, which means the same rules apply to the masses. Want proof? Go back and look at how they repeated the same nonsense each time the markets crashed and or surged upwards. They screamed that the world would end when the markets were pulling back. They alluded that the Milky Way was the next stop for the bull market when it was rising.
In both cases, they failed to spot the so-called top or the bottom. Why do you need someone to tell you the obvious? Do you need a jackass to tell you that the markets are crashing? The only function these media wenches/experts serve is to inject emotion into the equation, make the masses sing right at the top and make them panic right at the bottom. Tactical Investing Market Update Jan 14, 2019
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The Tactical Investor does not give individualised market advice. We publish information regarding companies we believe our readers may be interested in, and our reports reflect our sincere opinions. However, they are not intended as personalised recommendations to buy, hold, or sell securities. Investments in the securities markets, especially options, are speculative and involve substantial risk. Only you can determine what level of risk is appropriate for you. Continue to read the disclaimer in full.
