|
SE ND | I simply do not have the knowledge nor experience when it comes to determining a bottom of a market. So, my question is for those who seem to understand these processes. What I'm wondering is if a bottom can be formed without the psychology changing? I look at old crop corn trading at roughly $4.30. It seems as tho this market just doesn't have any legs to stand on right now. We had the report that showed things more bullish than was expected, and we got a 20 cent rally that day, but since then it has fallen some and been treading water so to speak. Can this market rally without a complete "flush out?" Would corn need to drop below long term support to weed out the weak hands before we see the trend change? I am curious how this mentality applies to other markets such as equities, real estate, and commodities. Some of my friends believe that the double bottom in gold has marked the bottom formation necessary to rally from. Personally, I just don't know. Like I said I'm not experienced enough. It could be that we rally from here, but to me it seems as tho we need one more nasty flushing out before gold gets its legs. By that I mean that this rally in gold could be a way to sucker in a few, and then drop hard below the previous lows, where everyone would then run for the doors saying the bull market is done.
I'm not only wondering this about the bottoming process, but also about the a market topping out. Does this psychology reverse itself thinking that it can only go up? I think of corn during the 2012 drought, and how all we heard of was 9-10 corn and I believe it just failed to break 850 and had topped.
These are just a few observations and I'm interested in whatever knowledge you can share with a young mind. | |
|
Psychology of market bottoms
