Stock Market Crashes Myths

Stock market crash myths

Stock market Crash Myths focus on the fear factor and obscure the Opportunity factor

Our overall philosophy is to let the trend do the talking, especially in this day and age when market manipulation is the order of the day.  The markets are not free; corrections end at arbitrary points. In other words, the top players decide when the markets will correct and how far they will drop and or rise.  This is why we focus on the trend and not absolute price targets as almost all free market forces have been removed. It took us an inordinate amount of time and money to come out with the trend indicator. Imagine how much easier it is to trade if you know the trend if you know that a pullback is a buying opportunity in advance of the fact.

Don’t fixate on trying to predict the exact top or bottom

However, some individuals are still fixated on the idea of exact points, as opposed to the idea of viewing strong pullbacks as buying opportunities.  This kind of mentality is what led these individuals to miss out on this 7-year bull market, and they look back sorrowfully wishing they had jumped in. What they forget is that they were doing the exact same thing today as they were doing yesterday. This is the reason this market is going to soar far higher than anyone expects.  There are many investors out there that fall into this category, and the sad part is that they do not even realize by adopting this mindset that they will end up buying right at the top out of pure frustration at having missed the entire ride up by waiting for that so-called perfect entry point.

If logic governed the markets, then all those with PhD’s would be rich

If reason governed markets, then all those with PhD’s and higher education would be the ones raking in the highest gains; instead, these chaps are the ones that consistently lose.   You need to change your mindset now and throw this fear out of the window. Stop waiting for others to give you the push you need to give yourself. You cannot expect someone to dig you out of the hole you dug yourself into. Your biggest problem is fear; the second one is that you are angry and upset that you missed the ride up so far.  The longer you hold onto the old mindset, the more you will lose.

You have two options now

  • Change today or risk losing even more in gains. There is no such thing as a perfect entry point. While we do issue targets, we understand that especially when it comes to major indices such as the Dow and SPX, that target might or might not be hit. As we have stated for the umpteenth time, there are almost no free market forces at play now; the top players decide at what arbitrary levels the correction ends. This is another reason the markets are experiencing such extreme moves as predicted in advance by our V-indicator. So the solution is simple. Make up a list of stocks, ETF’s, I-shares, etc. that you wanted to buy and wait for pullbacks to jump in. If you do not want to do any work, then you can open positions in the stocks plays we issue.  Remember there is no such thing as a perfect entry point. If that ever comes to pass, it should be assigned to pure luck, but if you wait for only for that moment, you will miss the whole ride up.
  • The second option is to continue to do what you are doing now and hope that the outcome changes with the time. However, remember that the definition of insanity is doing the same thing over and over again, and hoping for a new outcome.


The trends in all three indices, for now, is Up

So the course of action is simple; strong pullbacks are buying opportunities; the stronger the pullback, the better the opportunity.  It is a bit too early for us to look at what the markets will do next year, but we can already see signs that 2016 should be another strong year for the markets. Once again, those waiting for the ideal entry points will be left behind.  They will look back at today’s entry points and wish they had bought, just as they looked at the entry points they refused to jump in at 2014 and now wished they had jumped in. What separates today from yesterday? Nothing, they are held back by fear and then suddenly try to do something because they are angry that they missed this ride.

Masses will Jump in at or very close to the Top

Mark our words, these individuals will jump into the markets almost at or close to the top; at that point, Euphoria will be setting in, and it will be time for us to leave. What we find strange and amusing is how they will persuade themselves to jump into the market one day in the future when it is extremely overvalued and hesitate to do anything now, when it is not. Do not join this crew, for even though they claim to want change, they do the same thing over and over again. If they would simply sit down and look at what drove them before, they will see that the same set of silly emotions is driving them today. Hence, they are destined to lose. You cannot win using a methodology that failed before. There is a name for this; it’s called insanity.

If you are part of this group and want to break free, then force yourself to go against your emotions. Do the opposite of what you think you should, especially if it has failed to produce any results in the past.  Going forward view every strong pullback as a buying opportunity; change will not come from standing still.


Published courtesy of the Tactical Investor