We called the Fake Bear Market 2019 Storyline
Interestingly the experts started calling for a bear market in December right around the time the markets put in a bottom, clearly proving that fear does not pay well. So just before we get into 2019, the so-called experts or otherwise known as Jackasses started to bray that the end was nigh. Once again, the only thing that was nigh was their overblown egos.
If this bear market is anything like the last time, it could take some time to recover. Since World War II, bear markets on average have fallen 30.4 percent and have lasted 13 months, according to analysis by Goldman Sachs and CNBC. When that milestone has been hit, it took stocks an average of 21.9 months to recover.
Even when stocks enter “correction” territory, which is defined by at least a 10 percent drop from a recent high, there’s a long road to recovery. History shows corrections last four months, and equities slide 13 percent before finding a bottom. CNBC
Stock Market Bear 2020
It’s nothing but a repeat of all gloom and doom predictions that have been made over the past 100 years. In the end, the markets will establish and the fools will wish they had not dumped their shares at or close to the bottom.
Fear Is Useless when it comes to Investing:
Throughout the correction, we went out of our way to state that Fear was a useless emotion and that one should never give into it. We also stated in real-time that our subscribers should, focus on the trend, and keep a diary. Those of you that took heed and kept notes will now be in a position to see how your mind operates when it is controlled by fear. Fear pays very poorly, and the only ones that make money are the purveyors of fear. Mass psychology clearly states that so-called stock market crashes are nothing but buying opportunities as long as the trend is up.
New Over allocate funds to any given position
Many new traders over-allocate funds randomly to a given position. If you want to succeed you need to be disciplined and that means one’s funds must be divided into equal lots and deployed equally into any given position. Do not put 10K in one stock, 25K in another, 5K in the third and so on. Over the long run, this strategy will ensure your demise.
If 1-2 positions are adversely affected you will not be knocked out of the game if you have allocated the same amount of funds to each position. Additionally, it will be relatively easy to recoup those funds, but if you allocate a large sum of money to one position, and things go south, it is going to take you a long time to recover from that damage. However, the psychological damage is worse; some traders are unable to recoup psychologically after such an episode. Why take on unnecessary risk? The markets are rigged, so if you go out of your way to act in an undisciplined manner, you are asking for double the trouble.
Bear Market 2018 & 2019 is pure Rubbish
The list of stocks that we could potentially open positions in continues to explode; almost every stock that subscribers asked us to examine is on our “list of stocks to monitor”. One would think after such a strong rally, the list would get smaller, but that is not the case so far, which serves as further evidence that the masses are still anxious. When the masses are anxious, it is generally time to relax and look for good plays.
The sentiment data clearly reveals that the masses are far from bullish and until they are jumping up with joy, this market is not going to crash. As the trend is bullish, very strong pullback should be viewed through a bullish lens; build a list of top-quality stocks you would love to own and each time the market pulls back deploy some spatial into them.
Tactical Investor Update Aug 2019
Those that hold out for a meaningful correction might be sorely disappointed as on the monthly charts, the Dow is trading in the extremely oversold ranges, and this could limit the downside action. Individuals that use the term significant or sharp when referring to a correction who are not familiar with the concept of Mass Psychology, usually have floating targets. For example, before the correction starts, they might be satisfied if the Dow sheds 1500-2000 points, but after the masses are in full-blown panic mode, these guys will jump on the panic train and lower their targets. History illustrates that they will keep lowering the targets until the markets suddenly reverse course, catching them off guard once again. The crowd never wins, and that’s one of the main lessons investors need to understand when it comes to investing.
The favoured downside target would fall in the 25,400-25,550 ranges. As V readings are extremely high, there is always the potential for an overshoot as shown in the above chart. Unless the trend reverses (and there is no sign of this) all pullbacks should be embraced; the stronger the deviation from the norm the better the opportunity. Market Update April 23, 2019
Ideally, the markets let out a nice dose of steam
However, if they don’t that, that is fine too. We would be happy also if the markets hardly let out any steam, but negative sentiment spiked and our indicators pulled back from the overbought ranges. We focus on sentiment, and after we have identified what emotion is driving the markets, we move over to Technical analysis to help fine-tune entry points. As we have stated on several occasions, pullbacks should be embraced and the stronger the deviation, the better the opportunity.
Experts are hoping to identify the exact top or bottom, and this is precisely why market timing does not work. Emotions cannot be timed using mathematical models or theoretical constructs, as they are not based on logic. The focus should be on identifying topping and bottoming action and not trying to determine the exact top or bottom. Only fools attempt to do what history has proved over and over again as being impossible Extracted from May 7, 2019, Market Update
Stock market Bear 2020 Update (March 2020)
When blood is flowing in the streets as is the case right now during this coronavirus pandemic, one should consider nibbling at stocks if one has a long term perspective. Do not deploy all your funds in one short but deploy them in lots this way if the stock dips lower your average entry price drops.
When we get into plays (at the Tactical investor) we don’t think in terms of days. Under normal market conditions, our minimum holding time is several months. Under the current circumstances, our time frames lengthen as the potential for huge profits surges significantly. In the short term, it’s a bloodbath out there but is in such an environment that one finds outstanding opportunities and that also leads to the dawn of the next bull market.
It is easy to buy when the sun is shining, but the problem is that almost everything is being sold at a premium. It’s when things appear gloomy that the best bargains are found.