This Bull Market is universally disliked because it’s being artificially Propped
Throughout this bull-run, a plethora of reasons have been laid out to indicate why this bull should have ended years ago. Mind you most of those reasons are valid, but that is where the bucket stops. Being right does not equate to making money on Wall Street. In fact, the opposite usually applies. The Fed recreated all the rules by flooding the markets with money and creating and maintaining an environment that fosters speculation.
This is the most hated bull market in history is because logic states it should crash. In the 2008-2009 volume on the NYSE was in the 8-11 billion ranges and sometimes it surged to 12 billion. Before that, every year, the volume continued to rise, this indicates market participation. From early 2010 volume just vanished, it dropped to the 2-3 billion ranges and even lower on some days. Hence, all market technicians and students of the markets assumed that the markets would tank as markets cannot trend higher on low volume and that is where they erred.
No sellers around
The US government stepped in and started to support the market directly that is why volume dropped so dramatically. However as there were no sellers, the markets drifted upwards. Later on, they got the corporate world in on the scam. They set up the environment that propelled corporations to buy back their shares by borrowing money for next to nothing and then using this trick to inflate their EPS, without doing any work or even increasing the profitability of the company. Mass Psychology states that the masses are destined to lose; do not follow the crowd for they will always lead you
Mass Psychology states that the masses are destined to lose; do not follow the crowd for they will always lead you astray.In between a few minor corrections were allowed to transpire almost all of which took place on ever lower volume, to create the illusion that there was some semblance of free market forces at play.
Dark Pools helping this Bull Market Trend Higher
We also have something known as Dark Pools, this, in essence, allows big companies to purchase large blocks of shares without the trade showing up on the NYSE or any other major exchanges. In essence, it gives the government an avenue to manipulate the markets without actually leaving a footprint. As the US can print as much money as it wants, this is a perfect backdrop to do whatever it wants. By the way, don’t believe the hogwash that our debt is only 18.9 trillion. There is no real mechanism in place to check how much money the US creates. Nobody is allowed to audit the Feds books.
Fed’s objective is to devalue the US dollar
The Fed is hell bent on forcing everyone to speculate, and that is why we have moved into the next stage of the currency war games and the era of negative interest rates. Negative rates will eventually force the most conservative of players to take their money out of the banks and speculate. This process will be akin to another massive stimulus and will provide the bedrock for another huge rally.
Make a list of stocks that you would like to own and use strong pullbacks to add to or open new positions in. Some examples are OA, AMZN, BABA, GOOG, CALM, CHL, etc.
Video illustrates why this Hated Bull Market is destined to trend higher
Stock Market Fear and Greed are the primary driving force behind all markets
Stock Market Investing is all about not allowing one’s emotions to do the Talking; once your emotions start talking your money starts walking away from you. The financial crisis of 2008 scarred many individuals and scared away even more; add in the Great Recession, and one can see that the average Joe can come up with many reasons to avoid the stock market. However simple market sentiment analysis could have saved many a person from losing a significant portion of their wealth. To make matters worse, the unemployment rate remains stubbornly high, and wages in most instances are dropping instead of rising which means that many Americans have little to no disposable income left after expenses. Don’t for one second believe the twisted statistics issued by the BLS (Bureau of labour department); those statistics are on par with toilet paper.
Most individuals assume that they need a lot of money to invest in the markets
Stock Market Fear: Individuals making $30,000 or less per year are more likely to avoid the stock market, citing insufficient funds as one of the main reasons. There appears to be a misconception in thinking that one needs a lot of money to invest in the markets. Nothing could be further from the truth. One can start off with small amounts and slowly add to this base over the years.; the power of compounding is amazing. If you start young enough even putting away $50-$100 a month can add up to a sizable bundle by the time you retire.
The average person thinks that investing in the markets is very risky
This is just another misconception that has grown especially after the devastating crisis of 2008. If one is investing for the long haul and in quality stocks, then investing is one of the surest ways of making money and building a sustainable nest egg. However, one needs to understand what one is getting into and not plunge into the markets blindly as is the case with most individuals.
People assume that investing is hard to learn or master
We are referring to financial education and not higher education from institutes such as colleges or universities. We would even go as far as to suggest what these institutes teach regarding the stock market is useless. As with everything in life, if one wants to master a new skill, one needs to set some time aside for this endeavour. If you are going to talk the talk, then be ready to walk the walk. Don’t expect some expert to guide you to the promised land, for you will find that instead of finding paradise you are more likely to be welcomed into Hell.
https://www.youtube.com/watch?v=xkf44QK7Tng
Regarding the stock markets it would be wise to look at the history of the markets; study past stock market crashes; the events that lead to the crash and events that set the foundation for the next bull run. Then paper trade before deploying your hard earned cash?
If you are going to rely on a financial advisor; how are you going to know if he is not selling you sack of sawdust if you know next to nothing. In most cases people set themselves up to lose in the markets or to be taken advantage of; it takes two to tango. Surveys done by bank rate shows that Millennials were twice as likely as any other group to cite lack of financial knowledge as their main reason for avoiding the markets. If this trend persists, they are going to be ten times more likely to ask the government for handouts when they retire.
Most Investors Distrust the Financial Markets
Yes, one could say there is a valid reason to fear the markets as many Millennials have grown up in an era of financial disasters; two of the most painful ones were the dot.com bubble and the Financial Crisis of 2008, which later came to be known as the Great Recession. However, again, lack of financial knowledge and the wrong perspective is what provides the foundation for this fear. Fear is a useless emotion when it comes to the stock markets; the best time to buy is when blood is flowing freely; translation, so-called disasters always provide opportunities for the astute investor. Additionally, one could have easily sidestepped both disasters by paying attention to market sentiment; in both instances the masses were euphoric, and they thought the bull market could last forever. Nothing lasts forever and when the masses are ecstatic it is time to leave the party. Disaster can be viewed as an opportunity or as a tragedy; it all comes down to one’s perspective. Alter the angle of observance and the perspective changes.
The Concept of retirement planning is nonexistent for many
Bankrate states that only 25% of Americans check their investments and retirement accounts more than once a month. These same individuals can spend countless of hours on their phones texting each other or on Facebook or otherwise known as Face Crack. One does not need to look at one’s investments every day, however, spending time on finding out what’s trending or where the crowd is leaning could make the difference between banking your profits or trying to catch a falling dagger.
Ideally, individuals should have a rough idea of how much they would like to have by the time they retire and then come out with a feasible plan. Otherwise, they are bound to come up with some harebrained scheme that is fuelled by fear when they suddenly realise that the years have passed away, but the account is looking as miserable as it did on the day of its inception.
Fear and Greed drive the masses; they are Euphoric before a market crashes and panic close to market bottoms
Disaster is usually opportunity knocking in disguise, instead of running, stop and give it a massive a hug. The chart below clearly indicates that stock market crashes and other negative financial events are nothing but mouthwatering long-term buying opportunities.
The financial world often refers to black Monday (the crash of 1987) when they want to ratchet up the fear factor; on a long-term chart, it is just another blip that more aptly represents an opportunity rather than a disaster. In every instance before the market pulled back firmly, the sentiment was extremely bullish; in other words, the crowd was euphoric. If you used just followed the emotion you would have managed to avoid almost every disaster and this dates back to the tulip bubble. We are not talking about timing the exact top; those that try to time the exact top usually have plenty of time on their hand and an enormous appetite for pain.
For the masses, sharp pullbacks feel like a crash because they have the uncanny ability to buy exactly at the wrong time; they buy high and sell low. We will examine the concept of opportunity being masked as a disaster in a future article.
How Fear and Greed to your advantage
The word disaster represents an opportunity for the astute investor. It is only the uneducated investor that views a market pullback through a negative lens, and this is usually done because they have not taken the time to study the markets. One would be well served if one spent some time in examining the history of stock market crashes and what was taking place before the markets crashed. In every instance, one will find out that the crowd was bullish and every Tom, Dick and Harry was busy giving out financial advice. When the crowd is happy, you should leave the party.
Spending a little time on history and market psychology could prove to be priceless. If you take the time to do this, you will have a better understanding of the markets than most so-called financial experts. The phrase “knowledge is power” was not coined for no reason, but there is a difference between knowledge and rubbish. When it comes to the stock markets, most of the stuff that is marketed as valuable is nothing but garbage and in many cases what the experts make fun of is what you should be paying attention to.
For instance, market sentiment is far from bullish even though the stock market is trading close to its highs. Hence, all sharp pullbacks have to be viewed as buying opportunities. When the crowd embraces this bull market, it will be time to leave the party.
Indoctrination Definition: Are Your Perceptions Really Yours?
To understand this topic, what indoctrination means, let’s start with a question. If two men are arguing and one guy has data to back up his stance, and the other does not have data to back up his stance but irrefutably believes his view is the right one. Who is correct and who is wrong?
The obvious answer would be to state that the guy that has the data to back his point, but if one digs deeper one would have to ask whether this data is indeed valid, has it been independently verified are the sources legit, etc. But even that does not matter, for no matter what data either individual provides to the other, they will both stick to their guns.
The right answer is that they are both right, for nothing anyone can say will move them to change their position. Welcome to the world of indoctrination. Being conservative or liberal or open-minded or closed-minded, or whatever label you want to come up, is in most cases nothing but a form of indoctrination. You think the way you do because of your parents, the school you went to, the friends you have and your religious bent and so on.
Taking things even further, one can state that the liberals are not wrong for the way they see the world because they believe in that line of thinking and the same applies to the conservatives. Alt-right and Alt-left are nothing but forms of indoctrination and the extreme right and left have just received a super dose of brainwashing.
The masses are Indoctrinated Into Believing Experts Know it all
This is the main reason we have stated over and over again, that one should not wear their emotions on their sleeves, for no good can come from it. What has made things worse today is that very few people agree to disagree and move on to a new topic. Today opposing groups want to beat their views into the other group, regardless of whether they agree or not.
This is how the trend of polarisation started. Once you start telling a group that does not agree with you, that they are wrong, that they are stupid and start calling them names, a dangerous sequence of events is triggered and nothing the other camp says or no matter what evidence is provided, the opposing camp will refuse to budge. Look around today for that is where we are and the trend is still in its infancy.
Noam Chomsky Provides A Nice Overview On the Field of Indoctrination
This is a long topic and thankfully, Noam Chomsky provides a nice overview of this subject. We will cover this topic in more detail but if you are interested in understanding more about the inner working of the mindset, then this is a topic one should familiarise themselves with and this video provides a good starting point
Random notes on other topics besides indoctrination
The idea is to incept the seeds of doubt; if you want more clarification on this topic, just watch the movie Inception. The top players have been incepting ideas into the masses for millennia; it works brilliantly and the results are highly rewarding so this process is not going to stop soon. Once the seeds are sown, it is easy to use mass media to provide this seed with a nourishing environment and from seedling, this doubt grows into a massive tree.
In the guise of trying to provide individuals with information, the medias main goal is to brainwash individuals. One of the main ploys is misdirection; this technique revolves around the ploy of creating a mountain out of a molehill to redirect the masses focus. Sadly, this technique works like a charm. The two most effective Brainwashing institutions are public schools and the mass media
Brainwashing Techniques: Using paid experts to support a false narrative
This is another technique that works like a charm and it is blatantly used in the financial sector. Expert after expert spouts an opinion and often the opinions are in direct opposition to each other. The idea is twofold, first to load you with so much information that you don’t quite remember all the details. Secondly, the idea is to cover both ends of the story and when the outcome comes to pass, they make it look like that was the main outcome they were broadcasting all along. In other words, when it comes to the markets, the experts cover both ends of the game, therefore there is no way they can lose.
However, what the masses fail to understand is that they are guessing just like the crowd is, but the only difference is that they control the media, while the people in the crowd are nothing but passive observers, waiting to be taken for a ride. Brainwashing Techniques Institutions & The Media Utilize
How Brainwashing Works
During the Korean War, Korean and Chinese captors reportedly brainwashed American POWs held in prison camps. Several prisoners ultimately confessed to waging germ warfare — which they hadn’t — and pledged allegiance to communism by the end of their captivity. At least 21 soldiers refused to come back to the United States when they were set free. It sounds impressive, but skeptics point out that it was 21 out of more than 20,000 prisoners in communist countries. Does brainwashing really work in any reliable way?
In psychology, the study of brainwashing, often referred to as thought reform, falls into the sphere of “social influence.” Social influence happens every minute of every day. It’s the collection of ways in which people can change other people’s attitudes, beliefs and behaviors. For instance, the compliance method aims to produce a change in a person’s behavior and is not concerned with his attitudes or beliefs. It’s the “Just do it” approach. Persuasion, on the other hand, aims for a change in attitude, or “Do it because it’ll make you feel good/happy/healthy/successful.” The education method (which is called the “propaganda method” when you don’t believe in what’s being taught) goes for the social-influence gold, trying to affect a change in the person’s beliefs, along the lines of “Do it because you know it’s the right thing to do.” Brainwashing is a severe form of social influence that combines all of these approaches to cause changes in someone’s way of thinking. Full Story
The True Story of Brainwashing and How It Shaped America
Journalist Edward Hunter was the first to sound the alarm. “Brain-washing Tactics Force Chinese Into Ranks of Communist Party,” blared his headline in the Miami Daily News in September 1950. In the article, and later in a book, Hunter described how Mao Zedong’s Red Army used terrifying ancient techniques to turn the Chinese people into mindless, Communist automatons. He called this hypnotic process “brainwashing,” a word-for-word translation from xi-nao, the Mandarin words for wash (xi) and brain (nao), and warned about the dangerous applications it could have. The process was meant to “change a mind radically so that its owner becomes a living puppet—a human robot—without the atrocity being visible from the outside.” It wasn’t the first time fears of Communism and mind control had seeped into the American public. In 1946 the U.S. Chamber of Commerce was so worried about the spread of Communism that it proposed removing liberals, socialists and communists from places like schools, libraries, newspapers and entertainment. Hunter’s inflammatory rhetoric didn’t immediately have a huge impact—until three years into the Korean War, when American prisoners of war began confessing to outlandish crimes.
When he was shot down over Korea and captured in 1952, Colonel Frank Schwable was the highest ranking military officer to meet that fate, and by February 1953, he and other prisoners of war had falsely confessed to using germ warfare against the Koreans, dropping everything from anthrax to the plague on unsuspecting civilians. Full Story
Mass Hysteria definition: Current Overreaction Is The Perfect Example
According to Wikipedia, the definition of Mass Hysteria is
In sociology and psychology, mass hysteria (also known as mass psychogenic illness, collective hysteria, group hysteria, or collective obsessional behaviour) is a phenomenon that transmits collective illusions of threats, whether real or imaginary, through a population in society as a result of rumours and fear (memory acknowledgement).
In medicine, the term is used to describe the spontaneous manifestation (production of chemicals in the body) of the same or similar hysterical physical symptoms by more than one person. A common type of mass hysteria occurs when a group of people believe they are suffering from a similar disease or ailment, sometimes referred to as mass psychogenic illness or epidemic hysteria.Wikipedia
Consider the following data and decide for yourself
Over 22K people will die today from hunger; this probably one of the most horrible of ways to die
110K have died so far from this year’s flu and roughly 650K die a year from respiratory-related diseases
70K mothers have already died this year giving birth
Between 250K to 440K will die as a result of medical errors in America https://cnb.cx/33DF9cg
two decades worth of analysis reveals that over 100K Americans will die because of taking prescription drugs. A recent study states that the figure is close to 128K. https://bit.ly/39cYtOw
This article from the NCBI database states that 100K Americans died as a result of medical errors and it’s dated 1999. https://bit.ly/3dxoRGy
So the coronavirus epidemic supersedes all this and deserves the attention it is getting? We have not mentioned Cancer, smoking and cardiovascular diseases, all of which kill millions per year. What about the innocent children dying every day? They don’t matter. What’s shocking is that the other viruses that were deadlier did not even receive the same amount of attention. One has to ask the question of what is wrong with the retarded media. Are reporters today nothing but mindless bots?
The disinformation campaign is now in full swing
In the short-term technical analysis cannot identify support levels because we are dealing with madness and that is the reason, we added the new level in the anxiety index. What exacerbates the situation is that there is very little liquidity, look at the bid and ask price on some options they are unreal, for example, a bid of 1.40 and ask of 5.00. This provides a few big players with the opportunity to move the markets in whatever direction they see fit.
The disinformation campaign is so rampant, I felt that this something I needed to investigate directly to offer Tactical Investors a better look at what is really going. So I decided to take the risk and go to solo to Asia without announcing it. I wanted to see for myself if the US and the West, in general, was overreacting and if Asia was doing a better job on the psychological frontier. So far, I have visited Vietnam, Malaysia, Cambodia, Singapore, and Indonesia and I can honestly state that they are doing a much better job of controlling the panic factor then we are doing in the US.
Hysteria overcomes Logic and that’s when things run Amok
People are not emptying shelves left, right and centre, in fact, the only thing seems to be selling like hotcakes are face masks. One of the reasons for this lack of hysteria is possibly due to the fact that most third world/developing nations are used to dealing with hardships that developed nations like the US are not. The contrast in the way the Asians are dealing with from a psychological standpoint of view is humungous.
For example, Jakarta is about to declare a state of emergency and yet people are not running around in panic. Malaysia is closing down its borders and the biggest reaction was that Malaysians working in Singapore raced back home to pack up extra supplies and then headed back to Singapore, where they will stay for an extended period. Many Malaysians commute daily from Singapore to Malaysia. If the border is closed, they won’t be able to go back so they wanted to make sure they had enough clothing etc. for their extended stay in Singapore.
If the leaders of the West but in particular the US could act in the same way to instil calm in the populace the reaction would be different. There are no lockdowns here, at least not yet (other than in China) and the rate of infection is not going ballistic. Fear increases stress and stress actually weakens the immune system.
https://www.youtube.com/watch?v=JVqMAlgAnlo
Videos Illustrating How China & South Korea are Handling Coronavirus outbreak
We have moved deeper into the madness zone, and neutral sentiment has dropped to levels not seen for years. It is trading at 13, but bullish sentiment while below its historical average is still quite high, it would be ideal for it to drop below 24. Bearish sentiment continues to trend higher, and that’s a good sign. As things stand right now, we are close to another “mother of all buy signals” that would match that of 1987 and 2008. Our indicators just need to dip slightly lower into the oversold ranges.
For the “father of all buy signals”, the indicators would need to drop deeply into the oversold ranges, and the gauge on the anxiety index needs to move almost towards the end of the madness zone. Finally, bullish sentiment should drop below 22%. Remember this is a generational type signal so one should not expect it to occur with ease.
Subscribers who were with us back before Dec 2018 will remember how delighted we were when the number of new highs dropped to -10%. While everyone was panicking, we stated this was a fantastic development as the trend was positive. Now=look at the current readings; they are close to hitting minus 20%, something they did not even do in 2008. Given that the trend has not turned negative, this is a monstrous development. When the tide turns, we suspect that the Dow could rally 3600 points in one day with an overshoot to 4200 points. While everyone is focussing on the downward plunge, the melt-up is going to be so spectacular that it will catch all everyone and we mean everyone by surprise.
Courtesy of Tactical Investor
Coronavirus Mass Hysteria: buying toilet paper, canned food…
What explains?
First it was the masks, then hand sanitisers. Now it seems the novel coronavirus outbreak has people rushing to stock up, among other things, an essential item: toilet paper.
Shelves have been emptied across the world. In Australia, a newspaper helpfully printed out an extra eight pages as a “backup loo roll”. Fights have broken out, trolleys piled high, and across the United States, Canada and the United Kingdom, most supermarkets imposed a cap to limit the number of rolls a person could buy.
Dubbed #ToiletPaperPanic and #ToiletPaperApocalypse online, there is no shortage of videos capturing the mass hysteria that has swept up globally as shelves are cleared. Canned goods, water bottles and pasta shelves have similarly been emptied out.
So, why are we seeing panic buying across the globe?
“Panic buying and hoarding of supplies is obviously not desirable, but it’s understandable, particularly when people see images of cities, regions and even whole countries in lockdown,” Michael Baker, professor of public health at the University of Otago in Wellington, New Zealand, told Al Jazeera.
While panic buying was not seen in response to the most recent influenza pandemic in 2009, Baker said the ongoing crisis is similar to a behavioural response during a natural disaster.
“The difference this time is that people now see COVID-19 as a real threat, one that will last for months, and they may not have confidence in the authorities to contain it.” Full Story
How mass hysteria happens (and how to avoid the COVID-19 panic)?
Mass hysteria, also known as epidemic hysteria, occurs between two or more people who share beliefs related to symptoms suggestive of organic illness.
Research suggests that real pandemics can lead to mass hysteria.
A key factor that creates hysteria around pandemics is that the population’s ability to remain calm and react logically to the situation at hand is blurred and unfocused due to the anxiety and fear felt by large groups of people.
A pandemic, according to the Center for Disease Control (CDC) is defined as a “global outbreak of a new virus”. When dealing with a pandemic such as COVID-19, we need to be extremely cautious in the information we share. Pandemics (such as the Swine Flu pandemic of 2008) can very easily turn into mass hysteria cases, even though the threat is very real.
Mass hysteria, also known as epidemic hysteria, is a constellation of symptoms suggestive of organic illness but without an identifiable cause. It occurs between two or more people who share beliefs related to those symptoms, and has been described as a “social phenomenon involving otherwise healthy people.”
Mass hysteria has been well-documented throughout history, below are two separate cases from the 1900s that better explain what it’s like to be in the midst of mass hysteria. Full Story
