The Google machine says stocks are in big trouble.
Markets are said to be driven by fear and greed. In market cycles the shift from fear driven markets to greed driven market is obviously correlated to bull and bear waves.
However fear and greed are not in equal amounts because the active base of participants are not likely to experience both emotions equally. Crudely the markets are played by rich old people and they are more driven by fear than young people.
Crypto on the other hand is not an old mans game and is a new trading/investing format and unlike the veterans of equities appear or at least we during the boom, driven by greed. I
In so much as Crypto is driven by the young filled with hope it is a mirror image of equities and its despairing curmudgeons.
How can we use this idea for profit.
The first thing to realise is in a fear driven market, a bull market is no of much interest to the players. A doomster is not so interested in fair weather, they get their buttons pushed when things are going south. If they hear the Dow is up again, they aren’t going to check their portfolio anywhere near as much as when the stock hits the fan. Conversely in Crypto, the more Bitcoin rises the more that markets denizens are going to be glued to the ticker, but the moment it begins to retrace the less interested they are.
For Crypto this was clear in the boom when Bitcoin was getting search on Google at about the same level as TRUMP and NFL. Now it has slumped, its search intensity has fallen alongside the price.
So what about stocks?
According to the idea that fear driven market participants only care about their positions when they are going against them the following chart from Google has a lot to tell us.
You could say ‘huzzah’ people are back interested in stocks again and these are simply elevated levels of enthusiasm. I however see this chart of interest as a ‘fear’ indicator and what we have here is elevated fear. To be in a bull market we are going to have to see interest back to lower levels.
For Crypto the opposite should be true.
As such Crypto’s next bull will coincide with a spike in internet interest. Right now it still looks bearish for both Crypto and Stocks so while wehave enjoyed a nice bounce in stocks it looks like the bear has not gone back to its cave.
Meanwhile chart analysis fans have a new tool to play with when they are trying toanswer the only question that matters.
‘Is the market going up or down?’
For me its still down.