Sentiment & Positioning Throughout the Bear Cycle (Visualized) 📚
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Disclaimer: The above chart is not based on any data. It's based on my own experience during these cycles and just general things we do know about market cycles.
Obviously the price is just a general direction and not an accurate representation of how the market moves.
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Obviously the price is just a general direction and not an accurate representation of how the market moves.
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What we tend to see, which is no surprise, is how the masses tend to catch on to a bull market slow and buy when valuations are already severely inflated.
As well as stick around too long when the market is turning down.
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As well as stick around too long when the market is turning down.
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Meanwhile, big & experienced investors use this as their exit liquidity while they sell their bags and procceed to wait for the next opportunity to arrive.
It's always an exchange of impatient money to the patient money.
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It's always an exchange of impatient money to the patient money.
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Bigger & experienced investors are a tiny minority vs the other investors. These are also not the vocal ones on social media and in the mainstream media.
This can give a distorted view on the market and what's actually happening.
This is why indicators/flows can be useful.
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This can give a distorted view on the market and what's actually happening.
This is why indicators/flows can be useful.
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The new and smaller investors tend to keep believing until they have had enough and decide to sell it all. Causing the so called "Capitulation". This is when we can consider retail to have hit max fear/bearishness.
This is used as entry liquidity by the big investors.
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This is used as entry liquidity by the big investors.
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The experienced investors recognize the point to get out way before the masses.
While the bear trend goes on they are starting to search out for opportunities to buy instead of getting more fearful as prices head lower.
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While the bear trend goes on they are starting to search out for opportunities to buy instead of getting more fearful as prices head lower.
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This is the way the market moves and how it always will be.
Obviously this thread is not indicating anything about future price movements from this point onwards and should not be seen as financial advice.
I hope you have an amazing day 😄
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Obviously this thread is not indicating anything about future price movements from this point onwards and should not be seen as financial advice.
I hope you have an amazing day 😄
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