Why Everybody is so Wrong and You are Right
When it comes to the stock market everybody is confident. People foresee the future of prices so later on love to say: I told you so.
Everybody pretends to be ahead of you. However, you are the one who is right. Those who pretend to beat you, will be defeat.
August 1998-Market Collapsed
The price dropped by 20% from the recent maximum. The news of the world where the following:
- Terrorist Bombing attacks at two US Embassies in Nairobi and Dar es Salaam killing 250 people
- Financial Crisis hits much of South East Asia
- Monica Lewinsky Scandal
- US strikes against Al-Qaida in Afghanistan
- Devaluation of the ruble by 70%. Banks Collapsed
- Japan enters recession due to collpase of property prices
- Yugoslavia-Kosovo Conflict
- US home prices fell by 1.6%
What happened NEXT?
The SP500 index rose by 65%.
What about Nowadays?
- China stocks collapsing
- Ruble in Russia crashes by 70%
- Oil falls below 30$
- Europe and America debt over GDP
- Emerging countries in recession
- Terrorist attacks worldwide
- What are the skills of the former interns at the White House?
Price, You are Right
The price is basically moving sideways between 1860 and 2130.
Technically, in the last week it went deeper to 1857 points.
The last maximum was a relative maximum, meaning that it didn’t surpass the latest max. This is 2134 vs 2116. The price has begun to fall.
Bearish Scenario: Fall below 1860
Everything looks bad and ugly but the central banks need to distribute among the rest of the investors the heavy bags that can’t carry on. Ups and Downs with some positive measures to distribute worthless papers.
Bullish Scenario: Rise over 2130
The central banks mafia implement some measures, the market reacts way to positively pumping up the price over 2130. The Short Seller investors have no other choice than buying and fuel the next rally.
Scenario Side: Keep moving sideways
The price will keep moving approximately between 1860 and 2130.
This is the most comfortable scenario for central banks where they can keep playing the mafia game, this is, playing with interest rates and money supply.
On this scenario bears and bulls are going to be beaten up as typically the market magically goes a little bit beyond the boundaries of resistance and support.
Trying to predict the next market move is pretty much useless. Monitor the price. Wait for the new trend to begin and there will be plenty of chances to make it profitable. Size matters. Follow the Trend.
