The Single Most Reliable Indicator
The market is falling and has just broken the neck down in the widely watches head and shoulders pattern. Those who are trading stocks, the savvy ones who prefer stock market timing instead of buy and hold are shorting the stocks. Most people pay attention to the news and events and they try to buy sell accordingly. But news and events do not move the stocks. News are about the past and they hardly predict the future. It is like looking at the rear view mirror and trying to drive. There are various other technical indicators some of which do have predictive value. One of these is the traders sentiment. How many people are bullish? And how many people are bearish. The reasoning is simple: If everyone is already bullish, then every who can buy has already bought. We are out of buyers, therefore only 1 thing can happen: They can change their mind and start becoming bearish again. And when they do so, they sell stocks, driving the prices down. Going to the recent stock market top, we had these indicators ring the bells.
In this video excerpt, Elliott Wave Financial Forecast Editor
Steve Hochberg explains one of the most important things to keep in mind when
assessing a market, “Extreme opinions, shared widely, constitute the single
most reliable indicator of an impending change of direction for a market.” Enjoy
your video excerpt.
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Watch the Club EWI video series: Learn the Why, What and How of Elliott
Wave Analysis. This 3-video series is a great way to get started with the Wave Principle. You can get these videos free with a Club EWI Membership.
2 thoughts on “A Reliable Stock Market Indicator”
I’m going to pick a bone with a line from the ws cheat sheet.>Moreover, the US has seen these debt levels beofre and we emerged without sharing crumbs for lunch.Yeah, like WWII. The thing about wars is they eventually end. The debt loads we’re carrying now are structural, as in entitlements. They’ll end as soon as stupidity and old age end. They’re permanent, and this story is going to have a very ugly ending.>Moreover, the US has seen blah blah blah. The guy discounted himself to zero right there.
When you play with the Devil’s money, you agree to play by his rules. Dancing with the Devil, not a pretty site, the matroijy of players on both sides of the bet will be losers. We are just harming each other by continuing to play with the Devil’s money. The best move is not to play. Cash and canned goods, with a splash of zeroing out your debt seems to be your best option in this environment. The market can remain irrational longer than you can remain solvent. Stop gambeling, the odds are against you. Make money the old fashioned way, Earn It and save it. Timing the market in turbulent times will yield many losers. How the movie ends is still a mystery but one things for sure, it will not be pretty. Abolish the Federal Reserve! How many more times are we going to allow them to ruin our lives.
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