Technical Movement of the Market Wouldn’t Last Long

The cyclic nature of our market, bullish and bearish, is currently replaced, or rather pulled, by other sources it seems. Essentially dominated by fundamentals, the market is now run by technicals.

The market is not reacting to any astonishing news, good or bad, and is operating independently. This is nothing but an outcome of technicians-run-market. It is like a boat sailing on the sea, ignoring the signals of the radar. And obviously, this trend wouldn’t last long.

However, such market behavior is affecting investor’s profit. People generally buy before good news and expect good returns. Or inversely, they sell before a bad news is publicly declared to reduce their loss. But they get nothing more than being deceived. Hence, here are few things that you can do when such situation prevails.

1. Focus on your long term goals

   Changing your goals with every uncertain movement in the market would be foolishness. The current market situation is being run by technicians and it can be trusted. However, don’t change your long term goals and sell out all your holdings. This behavior, or any other behavior except fundamental, wouldn’t last long.

2. Get ready for a sling

   The prevailing market condition wouldn’t last long. However, when it resumes its fundamental behavior, it is sure to ascend with good news and plummet with a hint of bad news. Hence, get ready for a sling because the market won’t react like it does these days, or rather it will start reacting.

3. Don’t trust

   Don’t make hasty decisions depending on the interviews broadcasted on CNN because, like I mentioned, the current trend is a game sponsored by technicians. Maybe the interviewee is one of them. Instead, it’s advisable to read research reports provided by independent financial research firms.

Since January 2010, we are witnessing an absurd trend, which certainly isn’t its original movement. Switching your goals at this time would be an unwise decision. It’s is advisable to resist any reaction and wait for market to adopt its original method.