1929 Matching Cycle
Range-Bull-Euphoria-Depression
Comparing between the current and last century, I find both the development identical and fascinating.
I always enjoy doing research work on the behavioral science of the markets. In the price behavioural recognition works, it entails mainly decoding the development of greed, fear and the insider activities as well. Develop a conviction to keep testing on the findings until you are convinced with the results. These studies help me tremendously as both an investor and a trader.
For investing, I use charts or the study of price behaviours to pick-up signals or any potential reversals and trends. When there is an indication of an investment opportunity, since it is for investing, I will need to further make reference to the fundamental developments and or any other meaning numbers that matches to the signals presented before triggering any buying or selling decisions.
For trading, since it is for shorter term, I may use charts alone to make buy or sell decisions with a measured risks. Many times, without taking into any consideration of the fundamentals at all.
From the above studies, there are signs that we are in a euphoria and complacent stage. What next? I will be on guard with all investments and reduce my gearing especially on those longer term borrowing like property and others. It is also time to increase my trading activities since volatility has picked up starting this year.
I am so thankful to be an investor today compare to the last century. In the event of any long term downturn, we have so many derivatives instruments to choose from and even different asset classes that counter inflation to deploy into.
Some matching price behaviour between this current and the last century:
Turquoise - Range
All other colours - Bull
Orange - Euphoria
Last stage - Depression