It seems that everyone fancies him/herself as a contrarian these days. But what does that really mean?
Contrarian thinking doesn't just mean doing the opposite of the next guy (sorry, no more gender recognition). It means going against the crowd and that means that there actually has to be a crowd.
So is it contrarian to be bullish now? Not really as there are too many people thinking the bottom is in. But much to the chagrin of many, just because people think a bottom is in does NOT mean that it is NOT in. EVERYBODY would have to think that for a true contrarian to start selling the market.
So that is why I keep referencing basing process and not a trading range continuation pattern in a bear market. In today's column, I point out yet another sector with a lot of promise. In the newsletter I point out all of the positive technical evidence I see, despite only a few up-days in the last many. I even had a bunch of stocks this morning for the heck of it that looked rather good.
Of course, all of it depends on more normal market analysis and that is not quite the case in today's Abby Normal (Thanks, Eye-gor) market. But when it does start to calm, shouldn't you have a list of candidates to buy so you can get in a little earlier than the next guy?
Contrarian exercise - Which sector is getting the rottenest news right now? C'mon all you contrarians out there.