Stock Market Crash 2019: reality or all Hype

Stock Market Crash 2019A man profits more by the sight of an idiot than by the orations of the learned.

Arabian Proverb

Will the Experts get stock market crash 2019 Right? Stock Market Crash 2017

They got stock market crash 2017 wrong, and 2018, so will they sing a new song in 2019. So far nothing has changed as we have one expert after another predicting that it is time for the markets to crash; mind you these same chaps sang this same terrible song of Gloom in 2015, 2016, 2017 and so on. It never changes’ “flee for the world is going to end”.  Hahaha, what utter rubbish.

There is one noteworthy factor, though; a few former Bulls have joined the pack.  Does this now mean that the markets are going to crash? Before we answer that question, just remember

An article of interest Stock Market 2018 Crash Timeline

Stock Market Crash today; same old rubbish with a new name

This excerpt from the May 7, 2019 Market Update addresses this issue

In the last update the neutral readings came in at 42, prior to that it was 37, and the one before that came in at 41.00, and you can go back all the way to Jan of this year to see that after bottoming out at 18 (Jan 1, 2019 update), the readings have steadily risen. However, in that same update (Jan 1, 2019), the bearish readings came in at 53, since then it appears that individuals from the bullish and bearish camps have been migrating over to the neutral camp.  

The unexpected factor is that no one would have expected this to occur in a rising market.   In the 1st week of Jan, the Dow was trading in the 23,000 ranges after having dropped below 21,500 towards the end of Dec 2018. For the record, those holding out for a “crash like scenario” might be sorely disappointed, as crashes occur when the masses least expect.  The sharp pullback in Dec 2018 was something most did not expect as the markets had already pulled back from Oct to Nov 2018 and the follow through caught many with their pants down. Now everyone is expecting a strong move and what they might get is a minor pullback.

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.  Market Update May 7, 2019 

Market Crashes are nothing but perceptions

Stock Market crash 2o17, 2018 and 2019 are all based on perceptions; depending on when you embraced this market, the pullback could range from a crash to a correction. For Astute investors, a crash is nothing but the market letting out a well-deserved dose of steam. So, stock market crash 2017 or 2018 will prove to be a buying opportunity as long as the trend is up.  For others, it’s a monumental disaster and these investors dump the baby with the bath water. In doing so they provide astute investors with a once in a lifetime opportunity.

f you embraced this bull market in 2016, then a pullback in the 10%-15% ranges would feel like a crash. On the other hand, if you embraced this beast (Stock Market Bull) anywhere from 2009-2011, it would seem like a mild orderly correction.


We view Crashes through a bullish lens

As long as the underlying trend is positive.  The trend indicator determines the trend; the trend indicator is unique as it determines the trend in advance.  As the trend is up, is we can state with certainty that the naysayers are creating smoke out of nothing.  Until the trend changes we feel that all stock market corrections or crashes should be embraced and the greater the deviation, the better the opportunity.

Presently, the markets are letting out a well-deserved dose of steam, and there is no action better than Yo-Yo type action (up-down market action) to break the backs of both the bulls and the bears. When both camps don’t know what to expect, the path of least resistance is almost always upward.

Experts Wrong on Stock Market Crash 2019 As Evidenced by  History 

Experts State Stock Market Crash 2018 is a reality

They will make similar claims in 2018 and 2019 as has been the case every single year since this bull began in 2009.  If stock market crash  2018 comes to pass and the trend is positive (and it’s very strong and showing no signs of weakening) then view strong pullbacks through a bullish lens.

Most experts almost gleefully try to force their twisted perceptions on everyone. Just because the experts decide to label it as a crash does not mean you should follow their lead; experts are known for getting it wrong all the time. In fact, experiments have shown that monkeys throwing darts at a random list of stocks fare much better than Wall Street experts. Hence, take their so-called sage advice with a barrel of salt.

If Experts knew so much they would be talking less and investing in the markets more.

Stock market crash 2019 might or might not come to pass, but what about market crash 2015, 2016, 2017,2018  or the countless number of times they were wrong in the past. Had you listened to them you would have been bankrupt already? If these experts were so astute, then why have most of them missed one of the biggest bull markets of all time. Moreover, now they want to convince you that it is time to short it after failing to embrace it. How can one trust these penguins? If they failed to identify the bull market in the first place, how is it they are suddenly able to predict the top.

Stock Market Crashes are Based On Perceptions

Stock Market Crash 2017

Hence stock market crash 2017 or 2018 or 2019 is far from being set in stone. Several weeks ago we penned an article (excerpt provided below) where we stated that caution was warranted as the markets should let out some steam, but as the trend was still up, we did not feel it was time to short the markets. All the experts that stated it was time to bail out and short the market must be smarting from their losses.

The market loves to punish arrogant self-proclaimed know it all gurus.

Mass psychology is very clear when it comes to the markets; the masses need to embrace the markets before one can claim a top is close at hand. The masses so far have refused to embrace this market for a prolonged period.

When you think about it, everything comes down to perception. Alter the angle of the observation slightly, and you modify the perception. What appears bullish to one could be viewed as an extremely bearish development by another. When it comes to investing the goal should be to determine what view the masses hold whether it is valid or not is irrelevant for the difference between a truth and deception comes down to perception also. If the masses are leaning strongly towards a particular outlook, history indicates that taking a contrary position usually pays off. Stock market crash 2018 is no different from all the other previous predictions the masses have made; one thing is certain the masses hardly ever get it right.

The masses have for the first time embraced this bull market. From a mass psychology perspective, this is alone is not a huge negative. Mass Psychology dictates that the masses need to turn euphoric before one abandons the ship. It is not the time to abandon ship, but it is time to take a breather and let the storm clouds pass.

The Dow industrials exploded upwards and have experienced a near vertical move over the past two months. Under such conditions, one should not be shocked if the markets let out a stronger dose of steam than they have over the past 24 months. Tactical Investor

Mass Psychology  States Market crash 2019 is not a certainty

Crowd psychology is very clear in this area;  Bear Markets don’t start when the masses are anxious

Stock market Crash 2017-2018 is not a certainty

Stock Market Crash 2019 is Not Written in Stone  

The crowd appeared to embrace this market initially, but just as fast as they embraced it, they pulled back as illustrated by one of our proprietary indicators. In Jan of this year, the gauge was in the middle of the Mild Zone, but as you can see as of the last reading, the gauge has just dipped into the “severe” zone. The current market sentiment is far from bullish and indicates that stock market crash 2019 is not a certainty; a correction is more likely than a crash.  Given the current trajectory, we expect the needle to move deeper into the “severe” area in the very near future.

  See Opportunity instead Of Disaster If Market Crashes

Instead of pulling back the markets have continued to trend higher, and at this stage of the game, patience is called for. Ideally, the markets will let out a large dose of steam, but markets do not usually cater to your needs; barring a substantial pullback a nice consolidation would suffice. Market consolidations drive key technical indicators into the oversold ranges and allow the market to build up steam for the next upward leg.

This rapid change in Crowd sentiment validates what we have stated all along last year that the final part of this ride is going to be extremely volatile. It also confirms that all sharp pullbacks have to be viewed through a bullish lens, regardless of the intensity, until the trend changes. The trend is still up, and the masses are far from euphoric. Let’s not forget that Trump continues to inject a massive dose of uncertainty into the markets. When it comes to the markets, uncertainty is a bullish factor, for it means volatility is going to soar and volatility is a trader’s best friend.

Focus on Today for Tomorrow never comes

Stock Market Crash 2017 could become a reality or remain a dream

Stock Market Crash  2019 could become a reality or remain a dream; the Stock Market could have crashed in 2016, 2015 and or 2014; could have, would have, should have are pathetic arguments put forward by individuals who thrive on fear.

When it comes to the markets fear is the most useless emotion one can possess, for it yields no positive result. One day the markets will crash but as of today the bandwagon is not buckling under its weight, and the masses are not euphoric.

Experts Only Focus On  The Fear Factor

In fact, the crowd is getting anxious because they do not know what to expect. Markets climb a wall of worry and plunge over a slope of Joy. Thus forget about Stock Market Crash 2019  and focus on what the Crowd is doing. If the Crowd is Euphoric then caution is warranted and vice versa.

Given that this market has experienced such a massive run-up, it goes without saying that it needs to experience one relatively sharp correction; ideally, this correction would fall within the 15%-20% ranges. Yeah, we know, now all the bears will rush out and scream “we told you so”. Our response to these agents of misery would be “go crawl back under the rock you came from”. Just look how far the markets have rallied from their 2009 lows; to view a 15-20% pullback as the end of the world is an act of insanity.

One strong correction or Market Crash is normal and to be expected in a long-term Bull Market

Three Charts illustrating Hated Stock Market Bull Still has legs

Every strong bull market has to experience one adamant correction, and we do not think this market is going to be an exception.  This pullback will be followed by an even more powerful rally, and towards the tail end of this rally, the masses will embrace this market with gusto. Sentiment readings will soar, and everyone will be dancing up and down in Joy, and that is when the hammer will fall bringing an end to this bull market and triggering the first phase of a stock market crash.

For now, caution is warranted, but shorting this market is not something the prudent investor should consider; at least not until the stock market experiences a trend change.  Ideally, the market will shed a large dose of steam and in doing so scare the living daylights out of the masses.

People deal too much with the negative, with what is wrong. Why not try and see positive things, to just touch those things and make them bloom?

Thich Nhat Hanh

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