27 January, 2021
By John Gray
“Our most effective investment timing tools are the study of market-cycles and the analysis of investor behavior. The former looks at the regular up-and-down movements of the markets, similar to the regular changes in tides and seasons; and the latter examines the cycle of emotion, the changing behavior of Investors from bulls to bears, from euphoria to depression, and back again. These tools helped us to determine market tops and bottoms, it helped us to forecast market behavior for the last 30 years (and more).
What do the tools say about 2021. The up-leg that commenced at the March 2020 low is nearing its end: investor sentiment (emotion) has changed from super-bears (March) to neutral as the market rose to August and, after a pause, the bulls started a new upchannel in October. A change of market direction will likely begin in mid-February and lead to a corrective period fueled by President Biden’s announcements that do not favor the FAANG stocks and TC Energy (TRP), but could help the Golds and other Energy stocks.” (20-Jan-21)
Ron Meisels, Phases & Cycles, www.phases-cycles.com