Market Bear: How To Deal With The BS Bear Market Fable

Market Bear: How To Deal With The BS Bear Market Fable

Editor: Philip Ragner | Tactical Investor

Market Bear Is Growling?

 If you look at history going all the way back to the Tulip bubble one theme rings out loudly; the experts always claim to know exactly when the market is going to crash. Interestingly these same jackasses had no idea as to when the market would take off, but suddenly they have become experts regarding when the stock market should and must crash.

Hidden in this rhetoric is a hidden theme that the masses in most cases fail to spot otherwise, these snake oil salesman would have been out of business long ago; these chaps were wrong so many times that had you listened to them you would have bankrupted yourself several times over.  Note that even a broken clock is correct twice a day, depending on whether you follow standard or military time. Hence even if they eventually get it right, you would have been blown out of the water a long time ago. The scary Stock market crash that experts are overhyping

Market Bear: How To Deal With The BS Bear Market Fables

This article we penned some time ago, very adequately deals with the hysteria surrounding bear markets

So you ask why because it’s a prelude to a Massive Bull Run.  Stock market crashes represent opportunity, it requires a change in the angle of observation.

It all depends on what side of the fence you sit on. If you decided to pour all your money into the market close to the top, then it would be viewed as a tragic event. If on the other hand, you got in early and as the market trended higher, you banked some of your profits then it would be viewed as a splendid opportunity.  Crisis investing dictates that all disasters are nothing but opportunities, change the lens and the picture changes.

Stock Market crashes from 1929 onwards proved to buying opportunities

The main uptrend line is indicated by the solid blue line (last line in the chart above), but we put in a dotted navy blue line for those who would insist that the uptrend line could be drawn through secondary point.  Whichever uptrend line you choose, you can see that this point holds true, the greater the deviation, the better the buying opportunity. Look at the chart above; who won the from 1990-2016, the bears or the bulls?.  This chart is a clear illustration that the Doctors of Doom only make their money by selling the masses crap they would never dream of using.  Why Market Crashes Should Not Be Feared

 The difference between a strong correction and a backbreaking correction

A sharp correction is what we experienced in Feb of this year. The pullback is sharp and swift, and the fear levels rise significantly. A backbreaking correction is different. The term itself is indicative of the difference. The pullback is very strong but the volatility is insane, and the market appears to be bipolar. Chaos seems to be the order of the day, and even some of the most ardent of bulls start to question their stance.

Every bull market experiences one such correction. However, it is impossible to tell in advance which correction is going to fall under the back-breaking category. Trying to determine which correction falls in this category has a very high opportunity cost. It is tough to break out of the “anxiety stage” if you have been stuck in it for a long time. These traders eventually get their wish of very strong correction, but they are so scared that they are unable to act; they continue to assume that the market will keep going lower and lower.

Misery loves company, but it  Tends to Pay’s very poorly in the long run

It looks grim, the media is pumping end of the world type scenarios, strong bulls are showing signs of weakness, and even contrarian investors are starting to break. Pure contrarians are smarter than the masses, but they do have flaws; the smartest investors are the ones that put the principles of mass psychology into play.

They observe the mass mindset, and they understand that even when fear starts to creep into the equation, they are compelled to ask this question: Was the crowd in a state of euphoria when the market topped out? If the answer is “no”, then no matter how terrible the picture might look, the end game is that the crowd is being set up for a false downward move. And the normal response would “why”. Simple answer, this is an advanced form of Pavlovian training.

When the market does put in a bottom after experiencing a backbreaking correction, and then goes on to mount a powerful rally; the crowd imprints the following data in their minds. Buy the pullback, because it is a fake trap to drive us out; they also start to believe in the following mantra “the stronger the pullback, the better the opportunity”.

Markets Provide Warning signals when all is not well

Next time when the Market puts in a top, bullish sentiment will remain unusually high, and that will be the warning to students of Mass Psychology that the real skull-crushing correction is on its way. Again, we point you in the direction of the not too distant Bitcoin spectacular bull market and the equally spectacular crash. From low to high Bitcoin tacked on 11,000% in gains and the masses still assumed that the only direction it could trade was up. When it topped the Bitcoin was beyond ecstatic.

Look at the above sentiment data; right now the number of individuals in the bearish and neutral camps adds up to a 68. No market has ever crashed on a note of uncertainty and the masses are far from certain or bullish; hence, the least path of resistance is up.   Market Update Dec 2018

Bear Stock Market Update Oct 2019

As we have stated many times in the past, the hysteria over Stock market crashes and bear markets are permabear doomsters (yes this is a made-up word, but we are using to indicate how stupid these so-called experts really are)that have too much time on their hands and very little in terms of mental capacity.  we are going to list a host of factors that paints a bullish picture for the markets going forward and put this bear stock market theory rubbish to rest.

Copper continues to put in a bullish pattern and once the MACD’s on the monthly charts experience a bullish crossover, we suspect it will not be too long after that before the markets explode.

According to the Tactical Investor alternative Dow Theory, if the Dow utilities trade to new highs, it is a good omen of things to come. In other words, the Dow industrials will follow the same path sooner or later. The Dow utilities surged to new highs in September and as a result, the Dow industrials and transports are expected to follow suit.  The transport sector is expected to outperform the overall market.  We are looking at both IYT and XTN as possible future candidates and we might even add TPOR to our list but it will be placed under the secondary candidates and will be labelled as a high-risk play (3X leveraged ETF)

Huge amounts of money have left the market indicating that the crowd is panicking at precisely the wrong time. History indicates that whenever the masses panic, an opportunity is usually around the corner. Hence the only one that is going to take another round of beatings is the masses.

The Markets are mimicking the pattern they put in  2009; if this pattern completes it will lead to an explosive upward move.

Other Articles of Interest

dividend strategy

Dividend Investing Strategy: Your Path to Lasting Wealth

Unlock Wealth: Your Dividend Investing Strategy Dec 03,  2023 Dividend investing is a time-tested strategy that generates consistent income and ...
Best Stock Investing Books

Best Stock Investing Books that Transcend Expectations

Unlocking Success in Investing: Empower Yourself with the Best Stock Investing Books Updated Dec 2, 2023 Before commencing, it is ...
The Pitfalls of Investing

The Pitfalls of Investing: Why People Lose Money in the Market

Fool's Gold: Decoding Why People Lose Money in the Market Dec 02,  2023 The stock market is often viewed as ...
Learn How to Trade Options: Unlock the Secrets of Financial Freedom!

Unlock the Secrets: Learn How to Trade Options like a Pro!

Learn How to Trade Options: A Step-by-Step Guide to Maximizing Profits Nov 30,  2023 Before we delve into the effective ...
Wellness Wisdom: A Finance Enthusiast's Insight into the World of Health and Finance

Wellness Wisdom in Finance Enthusiast’s Insights

Finance Enthusiast's Wellness Wisdom In the bustling metropolis of New York City, where the fast-paced world of finance thrived, a ...
It's the Economy, Stupid: Unveiling Surprising Realities

It’s the Economy, Stupid: Not Exactly

Editor: Vladimir Bajic | Tactical Investor It's the Economy, Stupid: A Twist in the Tale Updated Nov 29,  2023 Introduction ...
Paradoxes: The Scorpion And The Frog

Paradoxes: The Scorpion And The Frog

Introduction to Paradoxes in Trading and Success Updated  Nov 27, 2023 In the intricate tapestry of trading and success, we ...
Mastering the Art of Stock Market Timing: Unveiling the Hidden Secrets

Cracking the Code: Secrets of Stock Market Timing

Decoding Stock Market Timing: Unveiling Hidden Strategies Updated Nov 24, 2023  While many individuals and experts argue that market timing ...
high unemployment levels

High Unemployment Levels: The Dance of Labor Statistics

Whispers of Destiny: The Lingering Presence of High Unemployment Levels Updated Nov 23,  2023  Intro: In the realm of labour ...
BTC vs Gold; The dance begins

BTC vs Gold: Decisive Victory Unveiled

BTC vs Gold: The Unstoppable Force Meets the Immovable Object Updated Nov 2023 The narrative of money supply and debt ...
Decoding Markets: Unleashing Mind Control Techniques

Mind Control Techniques: Mastering Market Dynamics for Success

Mastering Markets: Mind Control Techniques Revealed Nov 22, 2023 Introduction  The world of finance is a complex and dynamic landscape ...
Embracing Contrarian Meaning: Power of Alternative Perspectives

Embracing Contrarian Meaning: The Magic of Alternative Perspectives

Contrarian Meaning: Embracing Alternative Perspectives Updated Nov 22, 2023 Introduction Amidst the prevailing currents of conformity and groupthink, contrarian thinking ...
Alexa Speaker

Dethroning the Reign: Amazon Echo Dot Evolution

Editor: Philip Ragner | Tactical Investor Dethroned: Amazon Echo Dot - its Changing Status Once upon a time, the Amazon Echo ...
Decoding the Dow Jones Utility Average: find light in the darkness

Decoding the Dow Jones Utility Average

Using the Dow Jones Utility Average as a Timing Indicator for the Stock Market Updated Nov 20, 2023 The Dow ...
Strategic Exploration of Intel's Stock Performance

Bridging the Future: A Strategic Exploration of Intel’s Stock Performance

Nov 20, 2023 Brief overview of Intel Corporation Founded in 1968, Intel Corporation has become a powerhouse in the semiconductor ...