The Next Bull Market: on the Horizon or a Distant Prospect?
Updated Feb 09, 2024
The financial landscape is an ever-evolving entity shrouded in the mystery of market trends, economic indicators, and investor sentiment. The cyclical nature of markets, characterized by alternating bull and bear phases, often leaves investors questioning when the next bull market will arrive. Is it on the horizon, or is it a distant prospect?
Historically, every market crash has given birth to a new bull market. Despite the gut-wrenching roller coaster of plunging indexes and panic selling, these crashes are often the unsung harbingers of a bullish phase. Like a phoenix rising from the ashes, the market rejuvenated, bringing lucrative opportunities for those who held their ground amidst the turmoil. Therefore, the next bull market is always closer than one might think, concealed behind market pessimism.
From a mass psychology perspective, the genesis of the next bull market occurs when fear is at its peak. During these periods of heightened anxiety, the majority of investors are too paralyzed by dread to recognize the opportunities lying beneath the surface. This fear fertilizes the ground for the next bull market to take root and flourish.
Being a contrarian in such times can be a strategic advantage. By going against the grain and taking calculated risks when others are too fearful, one can position themselves for substantial gains when the market tide turns. However, contrarian investing shouldn’t be blind and requires a thorough understanding of market dynamics, trends, and risk management.
Coupling mass psychology with technical analysis can yield fantastic results. While mass psychology helps gauge market sentiment, technical analysis provides quantifiable data to identify potential entry and exit points. Together, they create a powerful toolkit for navigating market volatility and capitalizing on the inevitable birth of the next bull market.
In conclusion, the next bull market is not a distant prospect but a looming reality. It is often closer than it appears, hidden amidst market volatility, waiting for the opportune moment to charge forward.
Historical perspective on the Next Bull Market
As these vaccination programs have gained traction, this divergence has continued to widen. One would assume that individuals would be happy to invest in companies with solid fundamentals. One example among many companies is McCormick & Company, Incorporated (MKC). Business is booming. In fact, they can’t keep up with demand, and yet, the stock is a laggard. It appears that market players want turbocharged results. They let their greed direct the companies they invest their money into. This phenomenon has always been present to some degree, but now it is being embraced hook, line and sinker. This story will have a horrible ending. But until that time, it also means that there will be some spectacular gains made by astute and disciplined investors. When this market eventually crashes, millions of paper multimillionaires will be reduced to dust. Only when these chaps lose it all will they realise the folly of their ways. Market Update June 24, 2021.
And the cycle ended badly for those that chased stocks, especially meme stocks. Today investors are making another big mistake. They think the World will end now and are making the classic mistake they made during the 2008 to 2009 correction. They lost over a decade and only jumped towards the tail end of the move, just in time for the slaughter. When this correction ends, many investors, some on the cusp of becoming Tactical Investors, will miss out on 90% of the move. The next Bull market will last 6 to 12 years, and the odds are high that it will at least trigger a MOAB (Mother of all buys) signal.
The Next Bull Market: Embracing Volatility as Opportunities to Win
View volatility through a bullish lens as long as the trend is up. We are fast reaching the point where 4500-point pullbacks in the Dow will have to be viewed as minor aberrations. Once upon a time, anyone making such a statement would be considered a nut case. Market Update June 24, 2021
We are at this stage now, and probably in 18 months, one will have to view 5500 point moves as a walk in the park. Before, 90% of investors would lose, while 10% won. COVID changed the ratio to 92 to 8; before the dawn of the next bull market starts, the ratio will drop to 94 to 6, with 94% representing the losers. There is only one reason to be in the markets: to win. There is only one way to win; you must view fear and panic as buying opportunities.
Conclusion
We have too many woke traders who seem hell-bent on smoking their future away. They wanted gains delivered yesterday. They assume that chasing meme stocks and diving into crypto head first is how to make a fortune. Note how many lost everything and more during the meme stock crash and the ensuing crypto crash. Have they learned anything? Nope, they are chasing meme stocks again. Additionally, they were handed their heads and backsides on a rusty rotten platter in the cryptocurrency markets. Worse yet, most will bail out at the bottom, just when they should be buying.
On the same token, we feel that the stock markets have one more heavy downside wave. This is often called a selling climax, the opposite of the feeding frenzy stage. The markets will probably top in the 4th quarter of 2022 and correct for most of 2023. However, strong stocks will/should bottom around the 2nd quarter of 2023. This correction will provide the bedrock for one of the most robust bull markets.
