How You Can Be Right While The Crowd Loses

Have you ever wondered how you possibly make money when everyone around you is losing money? Jack Bernstein will show you how in today's video.

This video was produced live during an actual conference session. It's intended to duplicate, as much as possible, the experience of being there in person. As always, Jake is both interesting and provocative. His fascinating look into the markets is sure to make you think a little more about his recent discoveries.

WATCH NOW: How You Can Be Right While The Crowd Loses

The INOTV Team

When Perception Meets Disillusionment

Perception, in my mind, is one of the most powerful forces in the market. Perception can help drive the market up or down and currently that direction is down.

Disillusionment happens when investors become so stressed out that they become disenchanted with the market, remember 2008? That is what I think is beginning to take place right now in the markets.

Let me give you an example with a well-known stock. Just two weeks ago Amazon was flirting with the $700 level and investors were falling over themselves to get into the stock that they thought was going to go much higher (perception). Now here we are 14 days later and Amazon has dropped over 20%. Did Amazon's business change dramatically overnight, are the prospects suddenly bad now for Amazon? The answer is no, what did change was perception. Almost overnight everybody who wanted to get into this stock became stressed and disillusioned and then wanted out. Continue reading "When Perception Meets Disillusionment"

Many Are Betting on a Calm Market. We're Not.

Here's one good reason why: a historic market sentiment extreme

By Elliott Wave International

The DJIA, S&P and NASDAQ are struggling to bounce. Yet the bullish convictions remain high. Says a February 5 Investor's Business Daily headline:

"Why Mutual Fund Investors Need Not Panic After January Sell-Off"

When is the best time to get out of the stock market? When everyone else is invested and extremely optimistic. When is the best time to buy, then? Exactly: when you see the opposite sentiment.

Market sentiment is one indicator you don't hear much about on financial networks. Yet we've seen sentiment extremes repeat at every recent market top and bottom. What's more, as Robert Prechter, the president of Elliott Wave International, puts it, "the greater the degree of the advance that is ending, the greater the optimism at its peak."

This contrarian view of the market can be a financial lifesaver.

Below is an excerpt from Prechter's recent Elliott Wave Theorist, a monthly newsletter he has published since 1978. It shows you one way how Bob finds bearish and bullish extremes in the market. Continue reading "Many Are Betting on a Calm Market. We're Not."

Ding, Ding, Ding?

Behold the beauty of this title: Investors Most Optimistic on Stocks in 3-1/2 Years in Poll

I was reviewing this morning’s news items the above headline stuck out like a sore thumb.

A little stroll down memory lane:

In May of 2012 NFTRH 188 used this graph among other indicators to get bullish on a risk vs. reward basis, stating “and then there is this beauty… the dumb money has lurched hard to ‘risk off’.

Smart/Dumb money confidence, May, 2012

I personally took some pretty good grief for writing Dumb Money Sold in May and Went Away over at Contrary Indicator Central – AKA the Seeking Alpha comments system – to the version of the article published at SA.  The most memorable of the responses by defensive bears was “Gary = Dumb Investor”.  I considered these comments to be of great value, because to be an effective contrary market player you must, almost by definition, appear dumb to most people a lot of the time. Continue reading "Ding, Ding, Ding?"