Wednesday, August 10, 2016

Calls For Stocks To Crash Will Be Forgotten or Repositioned as Bullish #Stocks #StockCrash

News
These types of calls, the promotion of fear, generates a lot of Internet traffic, at least for awhile. That is, until the majority realize that bearish calls (1,2), often justified in the early stages of false breakdown, were wrong. After that, ill-timed opinions either quietly disappear or more often get reshaped in bullish calls when the majority is busy reading the iteration of the next big crash.

A detailed review of Sentiment reveals that the majority is still pessimistic towards stocks (see ssentiment concentration). Pessimism towards stocks favors base building, maybe a false breakdown that incorrectly convinces the majority a crash is unfolding, but not a crash from historic highs. This point, while boring in comparison to the hype of doom and gloom, is important! History's major market crashes were generally preceded intense optimism towards stocks. Intense optimism eagerly embraces theories advocating a permanently high plateau for stocks (see Irvine Fisher). After that a real crash leaves the majority as bagholders of another trend transition.

Headline: NASSIM TALEB: The markets will crash again and a lot of people will get hurt

Nassim Taleb, the man who popularized the “black swan” theory, recently did a Q&A with Yahoo Finance.

Taleb, the author of “The Black Swan” and “Antifragile,” is the “Distinguished Scientific Advisor” to Universa Investments, a hedge fund founded by Mark Spitznagel in January 2007 that specializes in convex tail hedging and investing.


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