Market Direction

The psychology of the market has shifted, highlighted by The Stock Bandit in a post titled When Bulls become Sellers. Its an interesting post about the current market conditions and how traders change direction in uncertain times.

"Those same bulls are now much more likely to become sellers into bounces. Will they sell at the first sign of higher prices? Yes, some will. Will some of them try to endure this pullback but eventually capitulate and flee for the safety of cash? Of course."

Motivations and confidence in the market have altered. The bulls can't afford to be bullish all the time and a safer direction has to be taken when conditions around you change. Looking at the chart I posted yesterday, corrections occur and until the bull becomes a bear these conditions need to be traded as such.

Beginning of a correction, the rumblings of a bear market or a mere blip in a bull market are all possibilities. Most views that I have read point towards the bull returning and fear of the bear seems to be at a minimum.

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