"We have not reached high enough levels of fear in the options market to suggest that this test of the lows is going to be successful," Arbeter said.
How should we view this quote? Well, fear was low during the last bull market. Too low in fact. Then the market got spooked and overreacted with fear. That's what we are seeing now. This guy is arguing that we need to see high enough levels of fear that so many people are selling that somebody's greed tell them, "Hey! Wake up! This is a risk, but with prices this low you could make a fortune." Once those people start buying, the market will start going back up.
It's funny because it's similar to the shoeshine rule. Once the average American thinks the market will keep falling for the foreseeable future, which is almost where we are at now, (also known as high-levels of fear) then it means the market will turn around.
By the way, I'm buying stocks big-time because of the shoeshine rule. Everybody is out of the market. In fact, the other day I heard Sean Hannity going on and on about how he isn't putting money in the market. Well, that tells FLG it is time to buy.
Posts
1 comments:
When you predicted $2 gas in May I thought you were nuts. My apologies for doubting you.
Post a Comment