Premium Market Analysis, Trader Education, Software, and Trading Strategies. Thirty Years Of Skin In The Game

Market Statistics

Bullish Charlatans on The Loose

“The best time to buy stocks is when they are rising,” said the charlatan analyst. You do not need an analyst to tell you that. What investors need is a sound bear market forecast so they can protect their wealth from evaporating.

Rogue analysts are again on the loose. Some of those charlatans were bearish in the 2010 – 2014 period and were recommending holding gold and commodities. Suddenly they have turned bullish, probably due to mental exhaustion. Investors do not need a charlatan to tell them to buy stocks when stock markets are rising. What they need is a sound forecast of a bear market and no rogue analyst can provide that.

What do you see in the DJIA chart below:


Despite the Great Depression, the 60s and 70s bear markets, the 1987 crash, the dot com bust, and the financial crisis, the longer-term uptrend of the stock market is up. This is why I call those who make bullish forecasts charlatans. I have explained the reasons with numbers in a few articles, this is the most recent one.

Anyone with access to the Internet can see that stocks move up in the longer term. But not anyone can withstand a 50% drawdown without panicking and selling near the bottom. What investors need are sound forecasts of the market top and bottom after a bear market. But those are hard and only a few can do them correctly. Being bullish is the default scenario. You do not even have to mention the word “bullish.” But some charlatan analysts have gone rogue recently. I look at their history and find out these are the same ones telling in 2012 that gold will outperform stocks and then in 2015 that stocks will fall 30%. Now, these rogue analysts blast anyone cautious. Everyone should be cautious. Everyday investors should be cautious. Money is made the hard way but easily lost. The rogue analysts who know well how to draw trendlines on charts overlook the fact that those who bought at the top of 2000 needed 7 years to recover if they ever did. Waiting for 7 years to recover is painful.

It’s easy to be bullish on stocks. Just look at the chart above. What do you see? It’s hard to be meaningful and useful. Charlatans are neither.

If you found this article interesting, I invite you to follow this blog via any of the methods below.

Subscribe via RSS or Email, or follow us on Twitter

If you have any questions or comments, happy to connect on Twitter: @mikeharrisNY

Charting and backtesting program: Amibroker


Technical and quantitative analysis of Dow-30 stocks and 30 popular ETFs is included in our Weekly Premium Report. Market signals for longer-term traders are offered by our premium Market Signals service.

Copyright Notice