Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Headed Higher because more Americans drink Coffee than own Stocks

Stock-Markets / Stock Markets 2015 Dec 22, 2015 - 12:15 PM GMT

By: Sol_Palha

Stock-Markets

More Americans drink coffee than invest in the markets and yet many of these individuals are stunned that the market is going higher when good jobs are not as easy to find, rents and cost of everyday necessities keep rising.  61% of Americans drink coffee on a daily basis compared to the only 48% that invest in the markets. These stunning facts were published in a  recent article; the article states that if the $1200 that the average American spends on coffee were invested in the market in 2009, it would have grown to $3600.


Upon reading the headline, we would not blame you if you shook your head and wondered what correlation is there between coffee drinkers and the stock market? If you are a student of mass psychology or a contrarian investor, then the evidence is staring you right in the face.

So what gives?

Well, we could give you the long answer, but the short answer is probably the best route to take in following with the KISS principle.    Mass psychology states that when the masses are fearful or cautious that opportunity is usually in the air, and that is what is taking place now.  The masses are uncertain; they feel that the markets should crash as the economy is far from healthy. What they fail to understand is that markets climb a wall of worry and tumble down a cliff of joy.  

The average Joe complains and whines about how high the market has gone and how it is too late to get into right now. How the market is going to collapse as the economic recovery is nothing but smoke and mirrors. How the real unemployment rate is much higher than the BLS (Bureau of Labour Statistics) states, and how real wages have been declining since 2000. If the markets operated on that type of logic, then all these average Joe’s would be millionaires, but turns out they are not and that is why they are called “average”, for they fail to think out of the box.

The masses are always on the wrong side of the market. In order to win you need to break free from the mass mindset.  This means that you should not base your investment decisions on your gut instinct. Instead, it would be prudent to pay attention to what the masses are doing.

The masses are nervous now, and that means the markets will continue to trend higher.  When the masses join the bullish club and turn euphoric, then it will be time to bail out.  For now, it’s not time to sell and the fact that more Americans enjoy a cup of Java indicates clearly that the market is not ready to crash.  

The markets are selling off right now; is that not a sign that the bull market is over?

It is not; the big guys are simply booking in some profits as they bought the rumour and sold the news.  Everyone was panicking about the Fed raising rates and for weeks on end we stated it was a non-event.  Few days before the Feds announced the rate hike; the markets took off and topped out shortly after the announcement was made. Our V indicator, which measures market volatility, has soared to a new all-time high, and we warned our subscribers that extreme volatility was going to be the norm going forward.   The higher the markets trend upward, the more volatile the situation will be. Hence, traders should not be surprised by these wild movements as they will only gather in intensity in the months to come. The trend is still up, and sentiment is far from bullish, and once the dust settles down, the markets should resume their upward trend. The stronger the pull back, the greater the buying opportunity; it’s hard to adopt such a mantra, and this is precisely why it works.

Diligence is the mother of good luck.
Benjamin Franklin

by Sol Palha

www.tacticalinvestor.com

Sol Palha is a market analyst and educator who uses Mass Psychology, Technical Analysis and Esoteric Cycles to keep you on the right side of the market. He and his partners are on the web at www.tacticalinvestor.com.

© 2015 Copyright Sol Palha- All Rights Reserved

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 losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in