Bearish sentiment has been trying to force its will on the markets lately. Ignore it. Traders often look for any excuse to find a new trend in equity markets so they feel confident hitting that sell button. This is especially true for bears.

Beware the bearish sentiment

As we know, you can’t tell the markets what to do. If you want to grow your portfolio, turn to technical analysis. Technical tools are your best bet for short and long term forecasting. They are not 100% guaranteed to work, but technicals put the odds in your favor. Opinions, on the other hand, do not.

Bears historically have a difficult time trying to steer the market in their direction. Bearish traders and investors often see the glass as half empty and reach for the smallest shred of evidence to convince themselves they are right.

Lately, they have been talking about stagflation. By definition, stagflation is low or no economic growth coupled with high inflation. Depending on your age, you may have zero experience with this terrible economic condition; the last time the US experienced stagflation was during the 1970’s.

The Fed will definitely watch for stagflation, so we are unlikely to see it happen. Yet, we continue to hear bears talking about it as if they are certain about the outcome. Here’s what I am certain about: the current technical condition of the market gives me confidence in future outcomes. Patterns repeat themselves, even in the stock market.

Learn how to read the markets

The technicals will never lead you astray. Turn to technical tools like price action, volume, option flow and the put/call ratio. Learn how to recognize patterns, like the W, M, head and shoulders and moving average crossovers. These tools will tell you so much more than a talking head in the financial media.

Be careful when those who seem smarter or more experienced than you start talking about the virtues of being bearish. The naysayers tend to stand out, making it easier to hear them. Any excuse will work for those who are swimming against the tide.