Exhuberance leads to everyone piling into the market. Following that comes a point where buyers (usually greed at this point has taken hold) are 100% engaged in stock ownership, no more money to buy, there is nothing to prop up the market any longer, then sellers outweigh buyers. On the other hand..... In a fearful market, most participants are heavy holding cash which begins to build, the longer fear reigns, especially in superannuation accounts and mutual funds etc. Buyers outweigh sellers as sellers have sold out previously. If you look back at long term charts, the bottom of the cycle is often flatish (that is from trepidation) and tops are parabolic, that's the final pop top of greed. We have lots of fear atm, it could be the leg up for the next few years of another bull market. The real fear mongers will miss it, only to join in near the top, as at tops, there is no fear.
Now that's the theory, reality is, in January this year the market exploded upward (no fear). If you look at SP500, peaks are getting closer together, this indicates we may be topping out. But at this moment, all looks ok, next week could be different.
I haven't even listened to it yet, but I strongly suspect I'll love it. Why? Josh frikken Brown. The accent reminds me of growing up and listening to my "New Yawk" relatives... but the guy (when on CNBC) ALWAYS cuts through the fog, and *nails* whatever everyone else seems to be missing. And sometimes, he's taking words right out of my mouth -- and sometimes, he's bowling me over with what seems *immediately*obvious* once he's said it, but to which I was blind and *totally* missing, beforehand. Love the guy. Okay. Now to listen....
The whole thing confuses me. Maybe it's just the long / short / arbitrage guy in me. Why care? All of this discussion about "Should I be long?" "Should I bail?" "Should I be flat?" "Should I buy Gold?" "Should I short Gold?" All of this directional nonsense. How about this. Be long. Be short. Be long and short in different periodicities. Be flat some markets, and bail on others. Then? Then who has to care what the market does. "Hey raVar ... do you think the market is going up, or going down?" My answer has been the same for two decades. I don't know. And I don't care. Because I don't have to know. And I don't have to care. I've got long Index Positions. I've got short Index Positions. I have long Gold Positions. I have short Gold Positions. I'm long Bonds. I'm short it in the Futures. There is a real reason why folks get involved in Term Structure trades in Futures. Make sure each strat has positive expectancy over time, mix 'em well, and after that? Who cares?
That guy pisses me off, beyond words. Doesn't really matter what I think. But I put him up there with Peter Schiff; who is about one of the worst voices ever ... in the market. But then again ... who cares what I think. Just an opinion. And everyone has them. I figure people should have their own voices. Listening to someone else ... and that includes listening to myself ... is deadly. Develop your own voice. As an aside? Every one was saying similar things in 2007 as well. Yields were great! Inflation was low! People were buying! And if there are problems? Then just look at the light at the end of the tunnel! Of course, that light at the end of the tunnel was the lamp of a freight train bearing down on them at 90 miles an hour. Why care? Get long, get short, get flat .... everything in different periodicities, with low-effort strats so you aren't killing yourself. I'm long the Indices, I'm short the Indices, I'm long Gold, I'm short Gold, I'm neutral on Emerging Markets, and Flat at the moment in STIR's. I'm long some individual names like UNP. And other times, I'm shorting individual names. All of it together? I don't have to care. Beautiful way to sleep at night.
The thing is, not everyone trades your way. What I'm getting at, everyone is gifted or has interests in different areas of trading. Hence we have a market as everyone pulls in different directions, which is good. I don't hedge, but I do diversify, and a directional trader, so market mood and direction is important to me and I actually enjoy reading mkt mood, I pull in a lot of data and analyse it for that reason.
Good point. I guess my posts were born of reading so much angst around the whole question. I hear the angst and energy and effort people dedicate to the question, it seems like a question that makes people tired, unnecessarily ... But you make a fair point. And remember ... I'm just an older curmudgeon ... who for some reason, is irresistably drawn to people against my own will .... "It's a good question ... what am I doing here ..."