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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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 watch these
videos free with a Club EWI Membership.
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.