On April 18, 2012 the stock market’s expectations passed into “High Expectations” territory thereby triggering a bear market bias. Although on a typical expectations cycle we would see the “Expectation Indicator” peak in “High expectations” then retreat immediately afterwards, but
Today the Expectations Indicator triggered High Expectations. When expectations change from low to high we could expect the stock market to become bearish.
Although the Expectations Indicator has triggered a Bear Market, Expectations remain low so we should interpret this downward move in the markets right now as a correction and not the start of a larger bear market move….YET.
Most times when we get what we want the most it turns out to not be what we expected at all. Some call this a fact of life and others call it a cruelty of life. Either way we can say that nothing really turns out how we expect it to be.
Although the Expectations Indicator has signaled a Bear Market, it has also shown that expectations are low and therefore giving the market the momentum it needs to form the right shoulder to a “head and shoulders” chart pattern forming on the Dow Jones Industrial Average.
The world was flat until Christopher Columbus sailed to America, changing the perspective of the shape of the world. In 1902 flying was only for the birds until in 1903 the Wright brothers changed that prospective. “The Art of Expectations” is a prospective capable of change.
If we have an interest in what is happening today in the stock market and our economy, then these books should be on the top of our reading list:
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:
The market has rallied back to even for the year and the Aussie has rallied back to above par with the US Dollar. The bulls are wiping the sweat off their forehead, and the bears are licking their wounds. The question on both sides of the fence is whether this is a bull or bear market?
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.