11/12/2014 – A mixed day with the Dow Jones down 3 points (-0.01%) and the Nasdaq up 14 points (+0.31%).
The easiest trade to make in today’s market is to go long. It’s a no-brainer and you can buy just about anything as the Dow hasn’t suffered a 100 point correction (even Intraday) in over 20 trading days. Most bears have been decimated and most bulls are coming out of the woodwork to once again make ballsy predictions. Case and point…….
Rather than debating fundamental aspects of today’s rally, let’s take a closer look at a much more important variable. Market/investor psychology. Oftentimes it is the most difficult trade to make that ends up being the correct one. That is to say, when everyone ends up on one side of the market, as today, the market tends to move the other way. Luckily, I don’t have to go further than 8 trading weeks to prove my point.
- Case #1: September 19th, 2014 Top. Market’s psychological backdrop was not that dissimilar to today. All time highs, never ending rally, Santa Claus rally is just around the corner and other BS. No one expected a massive decline that ensued. We went short on September 24th.
- Case #2: October 14th, 2014 Bottom. Most people were either freaking out or shorting the crap out of the market. No one was bullish. Everyone and their day trading grand mother were predicting a market crash. I was looking for a bottom. All shorts were covered on October 16th in preparation to go long.
Point being, when everyone begins to believe that the market cannot go down (as today), it is time to seriously consider the other side of the trade. To play a devil’s advocate. You know….to do some soul searching and to ask if Jesus would go long or short this market. Not to do so is not only dangerous, but is often the reason why so very few people can consistently make money in the market.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2014-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2014-2017 will start (to the day) and its internal composition, please CLICK HERE
(***Please Note: Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. November 12th, 2014 InvestWithAlex.com
Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!
