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Trading Lessons

Stocks Bear Market Apocalypse Imminent Crash Gets Nuked Again

Stock-Markets / Stock Markets 2015 Oct 06, 2015 - 01:59 AM GMT

By: Nadeem_Walayat

Stock-Markets

The last 2 months have been increasingly witnessing ever louder market calls for the beginnings of a new stocks bear market and this not just from the usual suspects, the perma bears who call every correction of the past 6+ years as marking the start of a bear market. Lately an increasing number of those who had managed to remain 'mostly' bullish in the face of a relentless stocks bull market have been increasingly coming out pronouncements of stocks now being in a bear market .


As an example, a quick google of 'bear market' reveals a series of articles by for instance MoneyMorning.com of ever increasing certainty (99.7%) that stocks were now in a bear market -

Is This a Bear Market?

It actually indicates there's a 99.7% chance we're already in a bear market.

Or more recently - Are Global Stock Markets Pointing to a Bear Market?

So again today's bearishness goes well beyond the usual suspects, counting even the usually bullish amongst their number.

So exactly how has this new stocks bear market been proceeding during the past month or so? Well the Dow's latest close of 16,778 is at its highest for the past 6 weeks!

Now forgive my ignorance but aren't stocks supposed to be falling during a bear market? Rising stocks, let alone failure of the always imminent stock market crash apocalypse calls is not bearish price action that supports such widespread absolutist bear market commentary, why?

Reeds blowing in the wind. That's what best describes 99% of that which purports to be market analysis. Reeds blowing in the wind. Bear market yesterday, on the fence today, and a bull market tomorrow, all AFTER the markets have moved. All part of the financial sales industry that is geared towards selling for mass consumption, written by journalists, professional copy writers and advertisers, a mere fraction of whom who will actually trade or invest and even fewer successfully!

REEDS BLOWING IN THE WIND!

So remember that when you read the flip flopping commentary from so called analysts that one day paint a picture of a bear market apocalypse but after a market rally soon start to suffer collective amnesia as they once more flop in the opposite direction, usually just as stocks are about to start their NEXT correction.

Stock Market Trend Forecast Into End Dec 2015

My recent in-depth analysis concluded in a detailed trend forecast for the Dow that after a brief rallying into Mid September would continue its correction into Mid October so as to set the scene for the Dow to rally by about 20% to over 18000 before the end of this year.

13 Sep 2015 - Stock Market Dow Trend Forecast for September to December 2015

My final conclusion is for continuing weakness that will result in a volatile trading range with a probable re-test of the recent low of 15,370 by Mid October that will set the scene for a strong rally into the end of the year that could see the Dow trade above 18,000 before targeting a gain for a seventh year in a row at above 17,823 as illustrated below:

However, whilst the Dow has rallied quite strongly into Monday's close, it is still in its time window for weakness for another week or so which implies it's not quite done yet on the downside. Nevertheless the big picture remains for a strong rally into the end of the year.

The bottom line is that successful investing demands consistency. For instance I have been bullish on stocks since the birth of the bull market in March 2009 (15 Mar 2009 - Stealth Bull Market Follows Stocks Bear Market Bottom at Dow 6,470 ) and since which time my strategy has remained very, very simple and consistent as illustrated by hundreds of articles and several ebook's which is that the "greater the deviation from the bull market peak then the greater the buying opportunity presented".

In my experience the only mechanism that actually works in generating accurate analysis in terms of arriving at the most probable conclusions is for the analyst to be conditioned through profit and loss of actually putting a significant % of their their own money on the line for there is nothing else that will focus ones mind to go the extra distance than just writing copy 9-5, else it really is just a case of reeds blowing in the wind.

This is a good rule for living life by, to experience reality rather than indulge in theory or fantasy. Unfortunately our modern societies are geared towards churning out the probationers of theory (fantasy) over real world tested substance i.e. the Universities, where I consider 70% of degrees attained to be pretty much worthless products of a education sales industry that give the graduates a false sense of perspective, a belief that the scrap of paper they are given after several years of attending lectures is somehow superior to several years of real world experience when the exact opposite is true, something that they will painfully discover soon after entering the real world.

Ensure you are subscribed to my always free newsletter for ongoing in-depth analysis and concluding detailed trend forecasts that include the following planned newsletters -

  • US Dollar Trend Forecast Update 2015
  • Today's New Homo Sapien Species
  • Islam 3.0

Also subscribe to our Youtube channel for notification of video releases and for our new series on the 'The Illusion of Democracy and Freedom', that seeks to answer questions such as 'Did God Create the Universe?' and how to 'Attain Freedom' as well as a stream of mega long term 'Future Trend Forecasts'.

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2015 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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