Monday, September 13, 2021

#USStocks Review #ES_F $SPY

US Stocks Review
Those that view the message of the market on a daily basis are likely confused by trading noise. While trading noise contributes to the long-term trends, it does not define them. Human behavior tries to explain trading noise as a meaningful trend. This confuses the majority which, in turn, contributes to their role as bag holders of trend transitions.

The global economy and stocks began behaving strangely in late summer of 2019. Repo rates spiked unexpectedly. Few acknowledged it. Anyone looking for a return to "normal" market by fundamentals will likely be disappointed in the coming years.

Stocks crashed in early 2020. Relative performance within the stock market suggests a reallocation of resources away from old to new economic plays. The old norm of "Made in USA" is not coming back. Manufacturing, design, and information collection will be borderless. Citizens will struggle to maintain their liberties and rights without oversight and intervention under this economic backdrop.

Rising stocks as the global and certain market groups decline is a real possibility that has been discussed for years. The stock market's distortion of reality is being attributed to the Federal Reserve. The Fed, contrary to popular opinion, is not that powerful. It cannot control the world's capital flows. The invisible hand, the true driver of market and trends, is redefining the world as the core economy passes from North American to Asia.

Subscriber Comments

Suddenly everyone thinks the stock market is going to plunge says a growing number of headlines this weekend. Headlines have been and will always be entertainment only.

If everyone thinks the stock market is going to plunge, then the majority would be pessimistic. It's important to understand concepts such as the majority and minority. Weighted Average Sentiment readings, lines 51 and 52 in the Trends Tab of the Matrix, defines what the majority is thinking, not what we believe they're thinking. WASo, the slow reading of sentiment concentration, is 0.42 (see Weighted Average Sentiment WASo). Extreme optimism is defined by readings greater than 1. 0.42 suggests that the majority is optimistic. An optimistic majority is NOT the backdrop in which everyone thinks the market is going to plunge. If they thought a correction or plunge was coming, they'd be bearish, which ironically, would make a crash less likely. Plunges happen when everyone is bullish and complacent - like today. Point being, headlines generate discussions that make no sense. It's part of the clueless misdirection game that keeps the public chasing its tail while clicking headlines that confuse.

If you're worried about a correction, ignore the headlines, and follow the invisible hand. We do that by watching the Matrix and learning to Time A Correction (or Worse). The invisible hand when sending warnings of varying degrees ahead of corrections and crashes. Learn to read them, and you'll soon understand headlines are for entertainment only.

Weighted Average Sentiment WASo

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