Wednesday, March 7, 2012

Sentiment

I noticed a headline in the financial press this morning - the day after the Dow lost 200 points in its first real down day of the year. It read, "Bulls Repair Street Breach."  At the time, the Dow had regained a whopping 30 points.

Why talk about the bulls? Why call such a tiny rebound a repair? Why call it only a breach instead of a more negative word such as "drubbing?"

The answer, in my opinion, is a bullish bias in the reporting. Not that the headline writer is biased but rather he/she and the editor agreed that was what would bring in readers - bullish readers - of which they assumed were the majority. Make that "still" the majority despite the technical damage that was done the day before.

Sentiment. A subjective art within the world of technical analysis.

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