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Market Players Getting Really Emotional

Submitted by Mike Swanson on Wed, 2008-06-25 16:08.

People are really getting emotional in this market. This morning the DOW gapped up over 30 points and the market rallied into the Fed meeting. At the same time gold fell 10 points on the open. I got three emails from people in gold scared that it was over for them and then about a dozen emails from people who thought the market had bottomed Monday and was about to begin another huge rally. I normally don't get this many emails from people getting really emotional about the market.

The bulls know I believe the market is going to fall over the next few weeks and wanted to tell me how wrong I was. After the Fed announced its decision to do nothing new with rates the market went a little higher and then gave up almost all of its gains on the close. Gold firmed up and the XAU gold stocks index finished the day in the green. People are obsessing over the day to day fluctuations in the market and not looking at the big picture. They are getting more emotional about worrying that they are going to miss out on the bottom and not looking at the primary trend or being concerned at all about the risks associated with holding in a bear market.

Matt Frailey of Breakpointtrades.com was kind enough to allow me to give you an article he wrote over the weekend about the larger market trends using technical analysis. He went through over two dozen market charts to help you see the big picture. We don't see everything exactly the same so it will be a good second opinion for you. You can read this article here.

Normally these articles are only for his paying subscribers. He's set up a limited time totally free two week trial to his service just for you. If you like his article you should try his service out. With this special link it won't cost you a dime. Just come back here and use this link. There are probably about a dozen people I talk to on a regular basis about the financial markets and he is the only one of them that has a trading website. There are no other trading websites I look at or can even recommend to you. His stock picks have been doing well.

-Mike


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Hello. My name is Mike Swanson. I’m the best-selling author of the book Strategic Stock Trading. In a former life I used to run a hedge fund from 2003 to 2006 that generated a return of over 78% during that time frame. In fact it was ranked in the top 35 out of 5,000 hedge funds in 2005.

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