Back in August I wrote this claiming that the conditions in the market were the complete opposite of what I observed back in 2000. As I mentioned in that piece, I believed a negativity bubble burst back in March, but you know what? Although that bubble may have burst it is far, far from being completely deflated. I've been browsing the bear blogs this weekend to get a feel for what the bears are thinking and it's quite clear they are now fully prepared and willing to short the market on any rallies. In their eyes, it's pretty much a certainty that the rally is over and the market is starting a "wave C" decline according the gurus of Elliot Wave Analysis. I got to say something about "Elliot Wave"....it is the biggest bunch of bullshit I have ever come across in my life! Their abc, 123 impulsive, blah blah blah bullshit is just that....bullshit! Whether you are bearish or bullish you can pretty much use EW to identify the "waves" that fit your bias. It's such subjective, bias confirming bullshit. If anyone who reads this uses EW and got offended I apologize....but that's just the way I feel!
By the way, anyone who worships Prechter, the chief guru of EW who was bearish just prior to the collapse of 2008 should know this....he called for depression 2 back in 1987 and remained bearish ever since that time. A stopped clock is right twice a day as the saying goes. Back in 2001 he also predicted gold would go to $200 when it was at $300. And did you ever hear him say "boy did I really get that wrong big time". Nope. Instead he uses the all too familiar "I'm going to be right, I'm just early" excuse and never once capitulated as far as I know. I'm sorry but being wrong for 20 years doesn't cut it as "being early" in my book even if now we get the collapse he's been calling for because no bear would be solvent today if they shorted the market in 1987. Yet a lot of newbie’s worship this guy just because he finally gets a call or 2 right after being dead wrong most of the time for decades.
Enough about Prechter. Let's go back to the markets. One of the bear sites I track made mention that CNBC's ratings have plummeted from a year ago by 50% and the popularity of bearish blogs like his own site has increased dramatically since. He claims "If the economic recovery was here for real, wouldn't the viewer trends be the exact opposite?"
To that I say hell no! If anything this confirms that the economic recovery and the rally we have seen is in fact real! The general public, i.e. the small time investor is the whipping boy of the stock market. THEY ARE THE LOSERS of this game. I've seen it first hand as a former investment advisor....the retail public gets interested in the stock market in the final stages of the bull market an then ends up selling in disgust swearing off stocks for good in the final stages of the bear market (or they sell into the first rally of the next bull market). So, the typical retail investor makes money for about 6-12 months and then ends up seeing all their gains turn to heavy losses before swearing off stocks for good and as I've seen during this cycle, a lot of them turn to the "dark side" and become perma bears.
I'm very happy to see that CNBC ratings have crashed, that the bearish blog sites are still very popular and that I still hear commercials on TV make mention of "tough economic times" all while the market has had one of the greatest rallies in history. All of this gives me a lot more confidence that my longer term bullish outlook is the correct one.
No comments:
Post a Comment