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    Volatility Reports 10/30/23

    October 29, 2023

October 29, 2023

Volatility Reports 10/30/23

Sounds like they have all gone bottom fishing

Which is rich for that is one of the riskiest bits of advice you can give. Here is a narrow-minded comment by a firm that have its face all over the financial news,

“…And finally, Healthcare. This sector has been forgotten about. I would encourage all investors to zoom out. Large-cap Healthcare is in a long-term secular uptrend. Just because it’s gone sideways for 2 years doesn’t change that.”

That was said after Friday’s close. He likes that sector because it is going down less than average.

Their brief was exclusively based on the use of relative strength to pick sectors.

But that is not going to work early in a bear market.  While they point to sentiment being at extremely bearish polling in their attempt to be contrarians, they are all bullish in their publications.  Here are a few of their suggestions.

“An undercut of a prior important low when a market is extended to the downside often turns into a short-term reversal; there is no sign of that yet ”

“The average year for the S&P 500 (since 1950) bottoms today.”

“The bull market’s first 10% drop. Before you bail, remember that seven out of the last 10 bulls dealt with at least one 10%+ drop in the first two years. This is normal.”

“AAII bears highest since early May. Not overly surprising given the weakness. Be aware it is late Oct historically when things tend to turn around. Looking at previous years up >10% at the end of June shows indigestion the past few months is normal. But things turn here.”

What else is clear is how a bear market creeps up on the majority.

This analysis of a competitor’s service fits their way of seeing the market here: ” We’re over three and half months into a stock market correction that I keep being told is just the beginning of a major crash. I’m just not seeing it.”

From an experiential point of view, being contrary is not about being different. It’s about knowing that the majority focus on the averages, like you’ve just read above – since 1950 etc. Being contrary is knowing that to be exceptional, you must look for the exceptions not the rules. As the kids say, “you find your power than you rock it.” You find out what you’re good at and you excel at it. Being contrary is waiting for the exceptional and taking it to the bank…

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