Herd Mentality Psychology: Predicted crude oil bottom

Herd Mentality Psychology: Never follow the crowd

Decoding Herd Mentality Psychology in Crude Oil Market

Updated Aug 2023

While we prioritize sharing the latest updates, we also maintain a record of past developments to provide a historical backdrop for our discussions. For enhanced clarity, dates are positioned alongside the most recent entries. As of August 2023, this article is current.

Herd mentality psychology is at play in the oil and energy markets. Not long ago, this sector was one of the most sought-after, but with the rise of AI mania, anything outside of this sphere was suddenly deemed a secondary investment. However, to everyone’s surprise, the energy markets, precious metals, and the commodities sector are poised for a comeback.


The consolidation process is progressing slower than initially expected; however, the oil market is gradually gaining momentum for an upward movement. Based on the current outlook, oil is poised to challenge the 90-100 range and trade as high as 140 before topping out.

Crude oil outlook Aug 2023

The initial level of resistance becomes relevant within the 83 to 84 range. Should there be a weekly closure at or exceeding 84, it is likely to trigger a trial of the 99 to 101 range. Now, if crude manages to conclude a month above 108, the path towards testing the 140 range, which hasn’t been seen since July 2008, becomes a distinct possibility. In this phase, savvy investors are advised to consider establishing positions in oil producers, drilling companies, pipelines, and other sectors directly linked to the oil markets. It’s worth noting that Warren Buffet’s ongoing accumulation of shares in OXY underscores this strategic direction.

 

Herd Mentality Psychology at Play in the Stock Market

Aug 2019 Update 

It takes zero effort to panic, and the reward is precisely zero; those that panic in the face of adversity are given what they deserve in terms of the market, which means less than zero, as the masses always sell at the bottom and buy at the top. The astute individual that does not panic walks away with a considerable reward, and that is how it’s been for millennia, and nothing will change for another 1000 years.

There is no law or set rules for the markets other than being able to adapt to a given situation. We deal with emotions, and chaos is set free when feelings talk. And that is why like cattle, the lemmings always stampede when the markets sell-off. The masses also tend to jump in when the markets are about to crash. Hundreds of years have passed since the Tulip Bubble, and nothing has changed.

The markets are volatile (Sept to Oct period), and the crowd tends to overreact to the news. Remember, every disaster becomes a disaster because the masses were conned into believing a false narrative. You say no way; how come reacting to disasters pays so poorly?  The stock market is the best barometer for disaster-prone. If disasters paid off well, the Dow should be closer to zero than 27K.

Herd Mentality Psychology In-Play

One thing you should never do is listen to fools who scream that the world is going to end or a market is going to continue crashing forever. Some markets are more manipulated than others; there are no such things as free markets today. So you need to accept that and move on. Watch the Video towards the end of this article, where the brain surgeons predict that oil could now hit $10.00 a barrel.  What is interesting is that in most cases, these same naysayers were stating that oil would continue soaring higher when it was trading over $100.00

Instead, please focus on the mass Psychology aspect of things; when everyone is gloomy, it is a sure signal that a bottom is close at hand. This is what we had to say in February of this year.  The content below is extracted from the market update sent out to our paid subscribers.

Nothing much to add here other than the projected outlook has come to pass.  Oil should not close below $30.00 on a monthly basis to indicate a tradable bottom is in place. The move to new lows suggests that another test of the lows is possible, with a strong chance of overshooting to the 23.00 range.   Market Update Feb 17, 2016

Herd Mentality Psychology: Don’t Listen To Experts

From a pattern perspective, oil has fulfilled the projections of putting in a bottom in Feb; after dropping down to the $26.00 range, it is up almost 20%. However, until the trend turns positive, the lows could be rapidly tested again with a possible overshoot to the 23.00-24.00 ranges, after which another fast reversal should take oil above 30.00.  Notice that the $30.00 price point level has held on a monthly basis.

Oil has not closed below this critical level on a monthly basis for two months in a row, and this has to be viewed as a very bullish development. Our overall view is for crude oil to trend higher, possibly trading past the  $55.00 range.  In the face of extreme negativity, oil is reversing, just as it collapsed in the face of Euphoria.  A weekly close above 35.00 will set the foundation for oil to trade past the primary downtrend line and, in doing so, send the first signal for a move to the $50 plus range.   Market Update Feb 29, 2016

Now to the Video making a case for $10.00, which sadly will not come to pass anytime soon; we don’t expect oil prices to trade up forever; in fact, renewable energy will displace oil in the near future. As early as 2020, the cost of an electric car could be comparable to that of a Petrol-powered car.

 

Other Interesting Reads:

Contrarian Definition: Think out of the box

Contrarian Definition: Tactical Investor Trading Methodology

Contrarian Definition Of Investing Updated March 08,  2024 In the sophisticated and intricate dance of the stock market, contrarian investing ...
Blooms and Busts: Navigating the Tulip Bubble Chart Phenomenon

Blooms and Busts: Navigating the Tulip Bubble Chart Phenomenon

Mar 5, 2024 Tulip Mania Unveiled: Decoding the Tulip Bubble Chart Phenomenon The Tulip Bubble Chart encapsulates a financial frenzy ...
herd mentality

Herd Mentality: Understanding the Pros and Cons of Conformity

March 5, 2024 Surviving the Herd Mentality: Divergence as a Crucial Survival Strategy Introduction Herd mentality, a pervasive force, drives ...
Projected Silver Prices: Setting Sail for Precious Metal Ascension

Projected Silver Prices: Setting Sail for Precious Metal Ascension

Projected Silver Prices: Navigating the Precious Metal's Future Updated March 1, 2024 Following the introduction, we will unveil our anticipated ...
which of the following is a cause of the stock market crash of 1929?

Which Of The Following Is A Cause Of The Stock Market Crash Of 1929

Feb29, 2024 Which of the following is a cause of the stock market crash of 1929? A Prelude to Chaos ...
Stock Bubble lead to crashes which lead to A buying Opportunity

Stock Bubble: Act Quickly or Lag Behind

Stock Bubble: Machiavelli Meets Lynch Approach Updated Feb 29, 2024 Riches come to those who seek them and not those ...
Does the Dow theory work; Lets take a test drive and see

The Dow Theory: Does It Still Work?

Does the Dow Theory Still Work?  Updated Feb 29,  2024  Recognizing the cyclical nature of history, we begin by illustrating ...
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 Feb 29,  2024 The stock market is often viewed as ...
Stock Market Tips For Beginners: Navigating Trends for Success

Stock Market Tips For Beginners: Surfing the Trends for Success

Stock Market Tips For Beginners: Best Time To Buy Updated Feb 28, 2024 Pursuing the perfect setup in the financial ...
panic selling

Panic Selling Mastery: Buying the Fear & Selling the Joy

Mastering Panic Selling: The Tactical Investor's Strategic Response to Market Turbulence Updated Feb 27, 2024 Many subscribers (mistakenly) assumed that ...
Leading Economic Indicators

Are Economic Indicators Finally In Sync With the Stock Market

Leading Economic Indicators: Unveiling the Secrets of the Stock Market Updated Feb 27, 2024 Imagine navigating the vast ocean of ...
Smart Investing Unveiled: Perception Manipulation and Sentiment Indicator

Perception Manipulation: Mastering the Market with Strategic Insight

s Perception Manipulation & Investing: Sentiment Indicators Unveiled Updated Feb 24, 2024 By the ripe age of 18, the average ...
Market Uncertainty: the emotion that separates traders from speculators

Market Uncertainty: A Challenge for Investors

Feb 22, 2024 Discerning the Hazards of Market Uncertainty with Poise Uncertainty, a state of being unsure or not knowing, ...
Stock market basics for beginners: do or die

Stock market basics for beginners: Adapt or Die

Stock market basics for beginners Updated Feb 22, 2024 A Contrarian Investor does not follow the Herd Sol Palha  Investing ...
Richard Russell Dow Theory, Useful or invalid

Richard Russell’s Dow Theory: Is It Still Valid?

 Richard Russell's Dow  Theory Signals Updated Feb 2024 Our perspective still favours the idea that a better alternative exists to ...

Mastering Finance: Beware the Pitfalls of Fear Selling