when did the stock market crash: forget the noise & focus on the Opportunity

when did the stock market crash: forget the crash focus on a correction instead

Editor: Draco Copper | Tactical Investor

We are barely into the middle of  2018, and there is already a slew of articles stating that the markets are going to crash in 2018.  What is amusing is that these very same individuals have been making the same prediction for nigh on ten years.  You would think that by now they would have had some sense knocked into them; especially since they have taken such a massive drubbing. No such luck, the same experts keep mouthing the same nonsense hoping desperately for a new outcome. Will The Stock Market Crash In 2018?

When did the stock market crash: forget the noise and focus on the Trend

The masters of deception AKA experts take delight in concocting all sorts of fables as to how the markets are destined to crash. They go on to state the markets will remain in a downtrend for years to come. Let’s stop right there, the only thing that has crashed is their ego, and the only downtrend insight is their dismal forecasting record.

From a Mass Psychology perspective, bear markets are nothing but buying opportunities as they will spawn the next bull market.  When you hear these nutcases posing as experts stating that the financial world is going to collapse, ignore the noise and focus on the facts. In almost every instance, these chaps are only predicting their demise.  History indicates that markets trend upwards for much longer periods then they trend downwards.  Additionally had an investor purchased top rated companies when the masses were dumping their stock during the so-called crash phase, they would have made a fortune over the years.

The Trend is your friend; the rest is nothing but noise

To be fair one does not jump in as soon as the masses start to sell or buy as soon as the masses turn bullish.   One looks for extreme shifts in emotion; when the crowd is euphoric it’s best to take profits and sit on the sidelines; if you are aggressive, you can short the markets. When the panic readings soar to the stratosphere, and there is a talk that the outlook can only worsen then the prudent call of action is to start establishing positions in top-rated companies.

Every time the Markets sell off these lunatics posing as experts start raving about the next crash and a plethora of articles are frantically penned as the experts are desperately hoping that things will pan out differently. Is this not a clear example of insanity in action; regurgitating the same rubbish in the hopes that the outcome will suddenly change.  One thing these guys are good at is writing fiction, and it makes you wonder why they don’t make a career out of that as they are pretty darn good at it; reality seems to elude them.   When did the stock market crash is actually a very stupid question: the truth is that it never crashed as the difference between a crash and a correction comes down to perception. Astute investors view strong pullbacks as corrections, while panicked investors view them as crashes

Mass Sentiment Drives The Market

Since the inception of this bull market we have repeatedly stated that until the sentiment turns decidedly bullish and for an extended period, this bull market is unlikely to end. In Jan the bullish sentiment soared past the 60% for the 1st time in years. This could have marked the end of the bull, but the markets let out a massive dose of steam over a very short period and negative sentiment soared. Bullish sentiment has continued to trend downwards from its high of 60 in Jan 2018.  Therefore, for now, a crash has to be ruled out, but the markets will continue trending in a wide range until they moved to an oversold state. So the question should be how to make money from a stock market crash and not when did the stock market crash.

The gauges below clearly indicate that the masses are far from bullish and one of the founding principles of mass psychology is that you never take a position against the masses unless sentiment readings hit the extreme zone.

Bull Neutral Bear chartAnxiety Index Indicator

The weekly chart of the Dow

When did the stock market crash

While the Markets are trading in the oversold ranges on the weekly charts, they are still trading in the extremely overbought ranges on the monthly charts. Therefore we expect the action to remain volatile until the weekly and monthly charts are in alignment. Until then the Dow is likely to remain range bound.

The Monthly chart of the Dow

Dow Jones chart monthly

The trend is showing no signs of weakening so all strong pullbacks should be viewed through a bullish lens. For those who are hell-bent on focussing on the bear market or crash factor; remember that the markets can remain irrational for much longer than most traders can remain solvent by betting against it.

When did the stock market crash; an idiotic question at best

The naysayers have been calling for a bear market for decades, and so far each bear has met a miserable death.   For example, the bears were screaming that the end was nigh when the Dow was trading below 20k, and then they made the same noise when it breached 21K and so on; the story is the same it never changes.

Instead of wasting precious time listening to these broken records, take a look at their track records.  The results are quite startling; over 90% of them have laid claim to the same silly story over the years, and they are still around. What does this tell you? Well if these Dr’s of Doom followed a shard of their advice, they would have bankrupted themselves several times over.  As they are still around, it means that they are trying to market their faulty information to you for a certain fee, information they would be loath to follow.

Focus on the Trend Instead of trying to figure out  when the market is going to crash

Determine the trend and pay close attention to market sentiment; if the masses are not euphoric then shorting the markets is a recipe for disaster and vice versa. Fundamentals and technical’s are both useless when used in separation.  Examine the emotion driving the markets. What are the masses thinking or doing? Stock markets always crash on a note of euphoria and the masses are for now are far from happy.

Until the trend turns negative, don’t listen to the experts for at best they are making uneducated guesses that they don’t even believe.  Anything that comes from mainstream media should be taken with a jar of salt and shot of whiskey. Until Fiat is eliminated, every massive correction should be viewed through a bullish lens for the Feds will pour even larger amounts of money to resolve the next created financial disaster. Until the masses are ready to reject Fiat, boom and bust cycles are here to stay. The stronger the market deviates from the norm, the greater the buying opportunity.

 

 

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2018

Is this the end for Bitcoin or is this a buying opportunity? (Jan 24)

Stock Market Insanity Trend is Gathering Momentum   (Jan 10)

Is value investing Dead   (Jan 9)

Irrational markets and Foolish Investor: perfect recipe for disaster   (Jan 5)

Stock market Crash Myths and Realities  (Jan 3)

Bull-Bear Markets & Arrogance   (Jan 1)

Will The Stock Market Crash In 2018  (Dec 11)

Has US Dollar Finally Hit Bottom    (Dec 6)

BitCoin Has Done What Precious Metals Never Could  (Dec 4)

Experts Making Stock Market Crash Forecasts usually know nothing  (Nov 17)

1987 stock market crash anniversary discussions- nothing but rubbish ( Oct 24)

when did the stock market crash: who the hell knows and who the hell cares