{"id":46066,"date":"2019-05-12T07:59:17","date_gmt":"2019-05-12T12:59:17","guid":{"rendered":"https:\/\/olduvai.ca\/?p=46066"},"modified":"2019-05-12T07:59:20","modified_gmt":"2019-05-12T12:59:20","slug":"at-the-end-of-the-day-its-all-about-confidence","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=46066","title":{"rendered":"At The End Of The Day, It\u2019s All About Confidence"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><a href=\"https:\/\/www.peakprosperity.com\/at-the-end-of-the-day-its-all-about-confidence\/\">At The End Of The Day, It\u2019s All About Confidence <\/a><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>And sentiment in the markets is now souring. Bigly. <\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While many factors contribute to their creation, market reversals only happen when a shift in sentiment occurs.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That\u2019s why bull markets can go on for much longer than reason merits. As long as the marginal buyer is keeping the faith that he can sell to someone else for more, prices will remain elevated no matter how ugly the underlying fundamentals:<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/www.fisherinvestments.com\/-\/media\/Fisher\/PrivateClientGroup\/Images\/DotCom\/CA\/Insights\/Stock-Market-Cycles\/Templeton_Curve.ashx?la=en-CA&amp;hash=209677F5F2C10E7A94A411F6EDA5F0ABF6CFF133\" alt=\"Market Sentiment Life Cycle chart\"\/><\/figure><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">But at some point, the once-bulletproof euphoria becomes exhausted. And at the critical margin, net buyers become net sellers. (For a reminder of the supreme importance the margin plays, revisit our report&nbsp;<a href=\"https:\/\/www.peakprosperity.com\/the-marginal-buyer-holds-the-pin-that-pops-every-asset-bubble\/\">The Marginal Buyer Holds The Pin That Pops Every Asset Bubble<\/a>)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here at PeakProsperity.com, we\u2019ve been waving a giant warning flag of late that the scorching rally since January is a massive head-fake; unwarranted and completely unsustainable.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In our recent piece,&nbsp;<a href=\"https:\/\/www.peakprosperity.com\/the-bully-rally\/\">The Bull(y) Rally<\/a>, we exposed how an extreme and unnatural amount of hand-waving, jawboning and razzle-dazzle from the central State has been expended to \u2018justify\u2019 the ludicrous levels today\u2019s prices are at given the preponderance of data showing the world economy is sliding into recession.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">We\u2019ve been shining a bright light on the technical compression seen in the major stock indices, indicative that a major breakout move is coming \u2014 one we\u2019ve argued is much more likely to happen to the downside.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Well, with the recent fizzling of the principal storyline supporting the bullish narrative \u2014 an imminent trade deal with China&nbsp; \u2014 our predicted downside breakdown finally occurred this week:<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/pbs.twimg.com\/media\/D6IVK7YX4AA-ir8.jpg\" alt=\"S&amp;P 500 Futures breakdown chart\"\/><\/figure><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">The above chart comes from Sven Henrick\u2019s&nbsp;<a href=\"https:\/\/northmantrader.com\/\">excellent work<\/a>&nbsp;tracking the technical overextension of the major indices. From it, you can clearly see how the S&amp;P has broken decisively below the \u2018rising wedge\u2019 formation it had been trading in since the start of 2019.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">&nbsp;\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>At The End Of The Day, It\u2019s All About Confidence And sentiment in the markets is now souring. Bigly. While many factors contribute to their creation, market reversals only happen when a shift in sentiment occurs. That\u2019s why bull markets can go on for much longer than reason merits. As long as the marginal buyer [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-46066","post","type-post","status-publish","format-standard","hentry","category-economics"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/46066","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=46066"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/46066\/revisions"}],"predecessor-version":[{"id":46067,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/46066\/revisions\/46067"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=46066"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=46066"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=46066"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}