Sunday, October 2, 2022

#Confidence Review #Gold #Silver #Bitcoin #Stocks

The old American idiom of a day late and dollar short applies to the majority's ability to time markets. The majority, a group seeking acceptance of opinions rather than investment discipline, views rising and falling prices as bullish and bearish. Emotions, the tendency to buy/sell when probabilities favor the opposite, relegate the majority as the consistent bag holders of secular trend changes.

Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.”, John Templeton

Subscriber Comments

Confidence supports markets, money, society, governments, and the institutions that define them. Inflation, or worse, materializes when confidence collapses.

This is an important review to better understand why inflation is rising, and society is beginning to fray.

Twitter barfs out a chart, makes a generic assertion, and the public believes it. Does confidence follow stocks higher and lower, or is confidence more complicated? If not, 500k followers are gobbling up tidbits of information better suited for the garbage disposal than tools to track the invisible hand.  Every trader, from stocks to gold, needs to learn how to anticipate confidence.

Confidence, like all trends, is a function of direction and concentration. Confidence's direction has been down since 2020. The computer called it, we warned you that confidence about to end a large bear phase that would essential clunk some financial heads. A quick search of the social media barf, shows us that heads are beginning to clunk.

Confidence Oscillator

Please tell us something we don't know! Confidence follows stocks, but the relationship is nowhere near as tight as markets down - consumer confidence down markets up - consumer confidence up would suggest. The correlation between confidence and stocks has been 0.32 since 1946. Any entry-level statistics book would classify 0.32 as weak. Weak does not support definitive assertions. The truth likely generates more enemies than likes and followers. Followers want to believe. Beliefs lose money.

Coinfidence Oscillator vs S&P 500 Oscillator

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