Stock markets climb a wall of worry, grinding ever higher.
Bear markets come out of the blue, with big daily drops common.
If Stock Tickle was like my other blog Monevator, I’d now spend several hours trying to find daily volatility data to prove that’s true.
But this blog is about quick posts and hunches, and my hunch is this new bull market feels different only because we’ve forgotten that shares go up as well as down.
Here’s the rally of the past month:
The FTSE 100 is up 10% in a month to 5 March 2010
So far so normal – the market moving upwards 10% despite continual talk about the Euro debt crisis is classic ‘wall of worry’ territory.
On the other hand, some traders are convinced big rises like today (we’re up 1.4% in the UK as I type) are due to short positions being ‘blown out’.
I think this is a classic case of lingering bear market mentality.
Most active traders have never believed the stock market recovery is sustainable. So they start from the position that rising prices must be due to the logical forces of bear-ism being overwhelmed by upward surges that smash through their defenses.
Markets melting up the new melting down?
by Mr Tickle on March 5, 2010
Generally speaking:
If Stock Tickle was like my other blog Monevator, I’d now spend several hours trying to find daily volatility data to prove that’s true.
But this blog is about quick posts and hunches, and my hunch is this new bull market feels different only because we’ve forgotten that shares go up as well as down.
Here’s the rally of the past month:
The FTSE 100 is up 10% in a month to 5 March 2010
So far so normal – the market moving upwards 10% despite continual talk about the Euro debt crisis is classic ‘wall of worry’ territory.
On the other hand, some traders are convinced big rises like today (we’re up 1.4% in the UK as I type) are due to short positions being ‘blown out’.
I think this is a classic case of lingering bear market mentality.
Most active traders have never believed the stock market recovery is sustainable. So they start from the position that rising prices must be due to the logical forces of bear-ism being overwhelmed by upward surges that smash through their defenses.
Yes, I am spouting stock market waffle.
The short version? It’s a new bull market, baby!
Tagged as: bears, ftse100, trading