Insider Insights: Unraveling Stock Market Trends 2020
Updated May 2023
On the same token, so many Magellan fund subscribers lost because they were trying to outdo Lynch. They sold when the going got tough and purchased the fund when everything looked rosy, the perfect recipe for destruction. Market Update Sept 20, 2020
Create an image of the sentence above in your mind, and you will notice, like clockwork, that the masses do the wrong thing at the right time. They follow this mantra with such perfection that it’s almost impressive; they never stop to ask the following question. What if we did the opposite? Even if they attempted this once only, their eyes would open to a world of new opportunities, but because they remain ingrained in their belief that one should panic the moment danger rears its head, nothing will ever change.
So, what can we gather from this? That no matter how good the fund managers are, stupidity trumps logic. Investors allow emotions to enter into the equation; the decision to buy is based on greed, and the decision to sell is based on fear. In essence, the odds of winning when employing such a strategy is virtually zero. Market Update Sept 20, 2020
Stock Market Trends 2020: The Curious Dance of Stupidity and Logic
Note that this danger the crowd creates is based on false perceptions. False perceptions are based on a set of false filters. Hence, with false filters and twisted perceptions, one is making a reality that does not exist, and in doing so, one has no hope of upgrading one’s operating system. Note that we all have operating systems to a degree.
These operating systems determine how you process the data you take in; this is why one person can see opportunity while the other can only visualise danger. And this is where the saying beauty originates in the eye of the beholder. More on this in future updates, but we will also post two new books. One today and one in the next update that should help provide some illumination on this topic.
Stock Market Trends 2020: Riding Mass Sentiment
The market of disorder rears its head again; the gauge on the anxiety index is back into the madness area, and under any circumstance, this would be viewed as madness. The markets have recouped most of their losses; the Nasdaq and the SPX soared to new highs, and the crowd is as hysterical as it was during the coronavirus sell-off. On the surface, bearish sentiment has dropped, albeit slightly, and individuals are somewhat less bearish. Take a closer look; the bears jumped into the neutral camp as neutral readings increased from 27 to 29.
We have an authentic version of musical chairs being played; only in this instance, the wrong move could cost one a fortune. Neutral readings have more or less remained constant since the markets bottomed. What is worse than fear? Uncertainty. At least when you are fearful, you have something to focus on. When uncertain; you are like a Yo-Yo swinging from one side of the fence to the other. The longer the crowd remains sceptical, the higher this market will run. If we had to make what is sometimes referred to as an educated guess, it is all but certain that the Nasdaq will trade to and past 15K
The monthly chart of the SP500
The weekly charts in all major indices have a stronger impact. From an investment standpoint, it is usually a very positive sign when the weekly charts have more influence than the monthly charts because it indicates a deviation from the norm. According to history and mass psychology, a stronger deviation from the norm presents a better opportunity. The short-term outlook will remain bullish as long as the SPX doesn’t close below 3198 on a weekly basis. If it does drop below this level, a test of the 3000 range is possible, creating a great long-term opportunity. However, the long-term outlook remains bullish.
As a new reader of Tactical Investor, it might be nerve-jarring to see sudden actions in the short term, but it’s important not to panic and follow the trend. Trying something new won’t hurt. Doing the same thing over and over again has never produced significant results, and mainstream media has brainwashed people into viewing strong corrections and market crashes as disastrous events. However, in reality, every financial disaster has proved to be a buying opportunity.
In the past, it would take a longer time for such opportunities to manifest, but with the Fed operating in “maximum overdrive” mode, it’s futile to resist. The Fed will achieve its objectives either by conning the masses or putting pressure on them. The latter is simple – do as you’re told, or they will destroy you. Even at this stage, the Gold bugs have not figured out the con. Despite Gold reaching new highs, when priced in today’s dollars (minus all the fake inflation data), Gold would have to trade at around $2900 to $3300 to equate to the highs it hit back in 2011.
Bitcoin, a digital fiat currency with the Federal Reserve’s backing, has reached a trading high of 20K. This is a level that gold is unlikely to achieve in the foreseeable future. While the Fed appears to be attacking cryptocurrencies, it is actually a ploy to make people embrace them even more. They only attack cryptos enough to give the impression that they want to destroy them, but their attack is never as severe as the ones mounted against the precious metals sector.
Even though gold experts may come out and state otherwise, the hard money and gold bug communities will never be able to beat the Fed. This is because they lack the numbers and support of the masses. If you want to bring about change, the first thing you must do is convince the masses. The word “convince” has two parts, and the major part to focus on is “con”. Once you con them, you make them “vince”, and it’s game over. Cryptocurrencies are being embraced at a rate that is 4 to 6 times faster than gold was ever embraced. At this rate, the critical threshold point of 65% will be breached sooner than expected. When 65% of the population embraces cryptocurrencies, the Fed plans to take over this sector.
If the Dow closes below 27,000 on a weekly basis, then a test of the 26,300 to 26,470 range is likely. There is no reason to panic for the trend is positive; hence, whether we like it or not, as Tactical Investors, we have to embrace these pullbacks and dare to do attempt the unimaginable. Celebrate in the face carnage for the separating factor between disaster and opportunity are perceptions. Market Update Sept 20, 2020
The Dow Jones Industrial Average traded below 26,500 (around 26,480) and was trading within the upper suggested ranges after crossing the 27,000 mark. However, it recovered those losses quickly because it didn’t end the week below 27,000. In the event that it closes below 27,000 on a weekly basis, we can expect it to test the 26,300 range with a possible overshoot to 26,000.
Unveiling Stock Market Success: A Winning Strategy Revealed
1. Embrace the Magic of Mass Psychology:
Unleash your edge by unravelling the collective sentiments steering market behaviour. Dive into how the majority thinks and gain a strategic advantage.
2. Dive into the World of Contrarian Investing:
Embrace a distinctive perspective and seize unique opportunities that others overlook. Learn the art of spotting undervalued assets poised for thrilling potential growth.
3. Anticipate Random Emerging Trends:
Stay steps ahead by identifying sectors on the verge of exciting breakthroughs. Recognize the emergence of trends before they captivate the mainstream market.
4. Uncover Hidden Gems among Promising Stocks:
Explore the methodology for identifying robust stocks within these promising sectors. Unearth the criteria that distinguish the thrilling winners from the rest.
5. Master the Thrilling Fundamentals of Technical Analysis (TA):
Elevate your decision-making process with the electrifying power of technical indicators. Fine-tune your entry and exit points using the potent tool of TA.
In the unpredictable realm of investing, there’s no holy grail. The only guarantee of success is to focus on the thrilling long term. Short-term pitfalls are inevitable when emotions run high, but the money is always on the move – away from your pocket. Focus on the thrilling facts the trends, and silence the noise. In the long term, losing is virtually impossible if you concentrate on the exciting journey with good companies.
First released on Dec 25, 2020, and revisited with the latest information in May 2023.
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