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Japanese investors at the end of their market's
bull run in 1989 were in the same boat as US
investors are now....needed the money for retirement
in 20-25 yrs....were averse to bonds,....committed to
equities as the asset class for long term appreciation,..etc.
In particular the Japanese were regarded as fervant
"buy and holders"...loathe to sell no mater what.
Yet when the market hit 20% down from the highs...
the sellers materialized.
A key tennent of Technical Analysis is that
"Market Action is Repetitive" and certain patterns
appear from time to time,...reflecting fear and greed
at extremes. I believe that human nature (psychology)
reacts to similar situations in consistent ways,...mainly...
PEOPLE ACT IN THE SAME MANNER AS THEY
HAVE IN THE PAST.
It is likely in my mind that US Baby-Boomers (just like Japanese
investors of the late 1980's) will bail when their pain threshold is
reached,..somewhere around down 20-30% from the highs. It is
the capitulation of these "longer term,...buy and hold" investors
that distinguishes a cyclical correction from a secular bear market.
Regards, JIM Pilliod jpilleafe@xxxxxxx
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