Since the 1987 Black Monday crash, within 30 years, we probably heard the word “Black Monday” more than 1000 times from the fearful and the insecure traders and investors and sometimes even from a “prominent” figures in the media. There is a reason why most traders fail in the market; it’s the fear; it’s the same reason why most people in business do not succeed.
See the thing is, when it comes to the stock market, there is no room for softness or fear–this market can smell that miles away and it will chew you up into million pieces and spit you out like you are a dirt. Obviously nothing is guaranteed in the market as much as nothing is guaranteed in life. No one can guarantee me that they won’t get sick or get a car accident this winter. However, if I study years of your past life style I would have a good idea/probability of that possible outcome.
So, let’s study last 10 years of NASDAQ’s life here.
You can see the moving average and the indicator I have depicted for this topic. There were three occurrences (including today) where the indicator hit the oversold level. Just like today, 2011 and 2016 there were tremendous fear and uncertainty while many traders and the “experts” alike calling for the major crash and probably threw around the word such as “Black Monday!”
If someone would have told you back in 2011 that it was a buying opportunity, you wouldn’t have believed in him/her (because of fear). If someone would have told you back in 2016 it was a buying opportunity (I did back in January 2016 – here, here and here), you wouldn’t have believed in him/her.
Because, think about it, if market was due for a major crash in 2011 then it’s more so crash is coming in 2013. If crash was suppose to come in 2013 then for sure it’s long overdue for a crash in 2016–this is why most people cannot participate in the bull market.
Most people did not participate in the 2016-2017 bullish-run because most people were calling for the “major global markets meltdown” in 2016. So now, here we are in 2018, majority of the public have who have been in fear in 2016, they are now back again calling for the crash today after missing out bullish run in 2016-2017.
It might not be tomorrow or next week but I believe the tide going to turn, and yet again majority of the traders are going to miss out on it calling/fearing the crash. Like 2011 and 2016, I look at this as a opportunity to accumulate more longs for the bullish run that could last for the next few years.
QQQ Weekly-Chart 2011 to Present
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