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Why 95% of Traders Fail

October Stocks Bear Market and Crash Killer

Stock-Markets / Stock Markets 2015 Oct 11, 2015 - 04:35 AM GMT

By: Nadeem_Walayat

Stock-Markets

We are now well into October, which is THE month for stock market doom and gloom to prevail. This is the month when the perma stock market crash proponents are at their most vocal when they dust down and repost ancient charts of previous crashes such as 1929 and 1987 and more recently 2008, to once more proclaim that history is about to repeat and a stock market crash is imminent. Though this time its even worse than usual because even those who may have been 'mostly' bullish threw in the towel several weeks ago to at least conclude that stocks bear market had begun.


A quick google of 'bear market' reveals a series of articles by for instance MoneyMorning.com of increasing bear market certainty, in fact you can't get much more certain than 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?

And I could continue, on and on and one with a long list of the former mostly bullish 'analysts' who apparently now think we are in a bear market.

So again it's important to note that recent 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 17,084 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 is not bearish price action that supports such widespread expectations.

Stock Market Trend Forecast Into End Dec 2015

My Mid September update of the state of the 6 year long stocks bull market series concluded in a detailed trend forecast for the Dow that after a brief rally into Mid September would continue its correction into 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:

Whilst the highly vocal bears may point to bearish chart patterns such as the 'head and shoulders, knees and toes' pattern. Instead it looks like the stock market is determined to severely punish the bearish consensus by resuming its bull market a few weeks earlier than even I had envisaged. Still it would have been better for the stock market to have suckered in a greater number of bears before pulling the noose tight around their necks, or perhaps given the earlier illustration the stock market HAD succeeded in doing so, it's just that in my calm corner of the market universe I had not fully appreciate just how bearish the majority had become.

So why am calm and relaxed whilst most others are running around like demented rabbits?

Look it's simple, very simple, stocks are NOT in a bubble, until stocks reach the bubble stage then they are unlikely to resolve into a bear market, having traded stocks for over 30 years, I KNOW what a real bubble looks like! In fact the bubble top may turn out to be another 4 or 5 years away! Imagine that a bull market that continues for another 4 or 5 years! IMAGINE IT, now imagine the perma bear crap that is going to flow as stocks relentlessly climb higher, do you really want to miss another 5 year bull run? Yes there could be a shock event that could bring the bull market to a juddering halt, such as The United States electing another Idiot for President who perhaps starts another unwinnable war and leaves another crucible for global insatiability behind such as Iraq. So, no its not a done deal but probability continues to favour a continuation of the bull market trend.

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 stocks ebook's (FREE DOWNLOAD) which is that the "greater the deviation from the bull market peak then the greater the buying opportunity presented". In which case given the recent deviation from its high of 15%, you have just had one of those great buying opportunity moments that it clearly looks like most will have MISSED due to what? Falling prey to a financial media sales industry that in reality amounts to nothing more than 'reeds blowing in the wind'.

Lately I have been busy revisiting the REAL MEGA-TREND, which will be the focus of my next in-depth analysis. What's the real mega-trend? We'll that would be the progress of the Genus Homo (humans) where we are trending from, stand today are going to next, so ensure you are subscribed to my always free newsletter to get this in your email in box within a few days time.

For a taster see my recent video which covered the initial spark that set in motion the Genus Homo trend some 2.5 million years ago.

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 -

  • Today's New Homo Sapien Species
  • 1987 - How to Trade a Stock Market Crash
  • US Dollar Trend Forecast Update 2015
  • Islam 3.0
  • US House Prices Next 3 Year Forecast

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

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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