Stock Market Volatility On The Rise?

What one needs to understand very clearly is that when the underlying trend is positive, despite all the so-called logical reasons, one and his merry pack of friends can conjure, the markets are not going to crash. They might experience a crash-like correction from time to time, but instead of running, one should jump in and back the truck up. We were one of the few publications that came out swinging and instead of panicking during the fake COVID 19 crash, we went on a buying spree; the rest is history.

Naysayers do have a purpose; their job is to drive the masses insane. These wenches work for the smart money group and will sing both ways as long as their pockets are well lined. Those that listen to these fools masquerading as a wise man were, are, and will always be in for a rude awakening. Never follow the masses, for they have the uncanny skill of doing the worst thing at precisely the right time, and sadly, generations later nothing has changed.

While bullish sentiment pulled back 7 points, it is still trading well above its historical average. Furthermore, the anxiety gauge has experienced another upward move. Last week's bullish sentiment readings were the highest in over 24 months. The anxiety index has experienced its fastest upward movement in almost 18 months. All in all, prudence indicates that we should proceed with caution when it comes to deploying new capital. This does not mean we are going to panic or worry; it merely means that we will aim for more conservative entry points. Remember, Tactical Investor never panic, and they never flee; they calmly finish the glass of wine, or a cup of java, etc. they are drinking and then stroll out of the room. Tactical Investors also never chase a stock; we wait for the stock to come to us.

On a positive note, neutral sentiment surged 8 points, indicating that the crowd is slowly becoming uncertain again. Uncertainty is the optimum emotion. When a group is skeptical/unsure, it is a clear indication that the stock market is going to surge significantly higher. Neutral readings of 50 or more have almost always been associated with ballistic moves. On the same token spikes in bullish sentiment have been associated with short-term tops. Look at the long-term sentiment chart below, and you can see that there is an interesting relationship between market tops and bullish sentiment. One can also state that when Neutral Sentiment spikes above 45, an opportunity is usually close at hand.

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Disclaimer: The Tactical Investor (The Ultimate market timing system) does not give individualized market advice. We publish information regarding companies in which we believe our readers may ...

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