The stock market turn points (tops and bottoms) defined by big money moves, that usually is the same but not always, with smart money. Big money is not a plethora of market participants; it’s not a crowd. And usually is not moving technically but mostly, they are moving fundamentally.
Fundamentally, the market today is expensive, so it’s a matter of time for big money, to take its move (unload). Why it hasn’t happened yet? Because of LIVLIR.
LIVLIR stands for LIquidity + Very Low Interest Rates. Big money has not a good alternative yet, so it stays in stock market, although valuations are fundamentally huge – see also this article HERE.
The rest of market participants, e.g. ignorant newbies, bold traders, are many in number but with weak ‘power’, as all together, have small money in contrast to big money. So all these, just follow like sheeps; that’s why they are called sheeple (< sheeps + people).
The sheeple get ‘slaughtered’ when the market turns from a major high, as the big money unloads. The sheeple in major market turns, are panicking, because the newbies don’t have the experience to realize that the market is expensive (that’s why they enter in late stages of a bull market) and the bold traders, are victims of their big self-esteem, as they usually think that they can beat the market on a continuous basis, they are over-exposed in their effort to win big and they are undisciplined.
Panayotis Sofianopoulos
Author of
Heretic Investor: A work smart, not hard, way to profit on Wall Street!
Find it on amazon:
HERETIC INVESTOR / ΑΙΡΕΤΙΚΟΣ ΕΠΕΝΔΥΤΗΣ
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