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![]() Triunity Theory ![]() Mood – The Psychologicals ![]() Mind – The Fundamentals ![]() Body – The Technicals ![]()
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![]() Mood – The Psychologicals
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The Market has Distinct Psychological Phases
The Semiotics Stages of a Bear Market graph is not a 'price' forecast. Too many people assume that price levels can be predicted. Valuations, as identified by price levels or PE ratios, are always relative. The most important thing is to understand the psychological phase of the market. The fixation on price levels is a typical cognitive error known as anchoring. It may be more useful to stop obsessing on price levels, and focus on where a market is in its psychological process. The goal of Behavioral Finance strategy is to develop practical models of irrationality, such as the Semiotics Stages of a Bear Market. Below is a 'psychological phase' forecast which we had shown on CNBC and USA Today just after the 9/2001 market low.