There are FOUR inferences :
#1) When stocks fall but fundaments seem fine : Correction has started but people are unaware, and buying.
This is when the market has already commenced its first leg of downmove, but the news still isn't doing halla-gulla about anything bad.
#1) When stocks fall but fundaments seem fine : Correction has started but people are unaware, and buying.
This is when the market has already commenced its first leg of downmove, but the news still isn't doing halla-gulla about anything bad.
https://twitter.com/techlunatic/status/1408336338294763523
#2) Stocks and fundamentals both are bad : Market has bottomed, and people have stopped buying.
This is when the news is doing maximum halla-gulla, people are shit scared and despite good prices, they wont hit the BUY button.
This is when the news is doing maximum halla-gulla, people are shit scared and despite good prices, they wont hit the BUY button.
#3) Stocks are rising but fundaments are bad : Bull market has started, but people are not buying.
By this time the market has already concluded its first upmove, but the news is negative and the ground reality is yet to catch up. The smart money has taken it up on anticipation.
By this time the market has already concluded its first upmove, but the news is negative and the ground reality is yet to catch up. The smart money has taken it up on anticipation.
#4) The ground reality and media narrative is in 100% sync with 'fundamentals'. The markets are also at an all time high. All worries have been discounted and the extrapolation of future profit beings. This is the top of the market where most investors will enter and get trapped.
Right now, we are in phase #3 where the market has caught smell of the economic boom to come, but the data just hasn't been printed yet. News is negative, markets at at a new high and people are not buying.
This new high is being misconstrued as bull market peak. It can't be a peak if all are saying that things are bad. Everyone is in disbelief at any positive prospect.
This is not how market tops are made. A market euphoria needs 100% suspension of disbelief i.e lowering of guard.
This is not how market tops are made. A market euphoria needs 100% suspension of disbelief i.e lowering of guard.
When all the worries get discounted one by one, we'll eventually hit a peak, which is still years away.
When the news, the people, the fundamentals and the stock price will be saying in unison "things are looking great", there will be no sellers left in the market, only buyers.
When the news, the people, the fundamentals and the stock price will be saying in unison "things are looking great", there will be no sellers left in the market, only buyers.
When will we hit a peak? there is no definite "Nifty level" or timeline. It will arrive when the biggest worry gets discounted in the price i.e "will India be a 5T $ economy?"
As long as people are doubting it, it will keep going up. Once it becomes apparent, it will be a top.
As long as people are doubting it, it will keep going up. Once it becomes apparent, it will be a top.
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