The stock market has come under pressure as of late even though the Expectations Indicator signaled low expectations on 6/12/2012. The stock market is higher (as of this posting) as of 6/12/2012, but the recent activity may draw question to the Expectations Indicator signal. Although it may appear the bears have taken control of the stock market, the fact is the market is trading just as a low expectations market would.
Expectations came off their high readings and almost triggered low expectations on May 29, 2012. Since expectations were unable to cross into the low expectations threshold a bear market bias still exists according to the Expectations Indicator.
Today the Expectations Indicator triggered High Expectations. When expectations change from low to high we could expect the stock market to become bearish.
The Expectations Indicator signaled a Bear Market on September 16th, 2011. The Expectations Indicator signaled Low Expectations on October 3rd 2011 . The market is experiencing a Bull move within a Bear Market.
On September 16th 2011 the Expectations Indicator (included in the “The Art of Expectations”) signaled a Bear market. When me move from a Bull to a Bear market not only does the direction of the market change but also so does its psychology.
In 1969 in her book “On Death and Dying”, Elizabeth Kübler-Ross revealed the five stages of grief. It took Elizabeth interviewing over 500 hundred terminally ill patients to discover the way we face bad life changing news.
In her book she detailed these stages as the following:
Why does the stock market go up one day then fall flat on its face the next? The media always has an explanation. One day the economy is on a road to recovery and the next is doomed to fail. If we were to make investment decisions based on the medias interpretation, be would be buying at the highs and selling at the lows.