As the Wall Street Journal says, “Volatility Teaches New Investors That Stocks Go Down, Too.” In other words, some folks are getting “schooled.” But who knows, the new wave of Bullish traders may push the market up even higher. Or, as the technicals are hinting, there may be some more schooling to come. My analysis and comments are in this week’s video.
This year’s market has schooled both experienced and inexperienced traders. In March, after the market went down and started to climb back, many experienced traders were predicting that the market would do a Fibonacci retracement and then head back down while inexperienced traders were piling into the market. The market did not retrace but instead made a V-shaped recovery, the fastest such recovery in history, and then went on to new heights. The result was that the inexperienced traders profited, while the experienced traders missed out on much of the gains.