October 13, 2022

MarketMap™ 2022- Scenario Planner Issue#21

Nature of a bear market

“…good news is ignored, and bad news is exaggerated.”

After a top is in place there is indifference reflected by the public and media.  Buy dips are programmed into behavior. However, with the smart money, the early adopter uses the mass of new entrants for liquidity to sell into.  As the decline starts to pick up steam, the late majority average down their cost by buying more. The good news stops getting positive follow-through in higher prices because demand is overcome by supply. Good news leads to prices going lower and bad news accelerates the downtrend.

The structure of the bear is complete with its own forms and patterns, like one-day wonder advances: sharp and short-lived reversals that live for one to three days.

Fake news begins to propagate making headlines. Add to that all of the misdeeds, scandals and reckless speculation, and corrupt biz practices of the past upcycle come to light.

The overall mood of the unreflective

This work by Jack Cahn is licensed under a Creative Commons Attribution-NonCommercial 4.0 International