Authored by Sven Henrich via NorthmanTrader.com,

Time for an update on macro and technicals as we are navigating through the complex market fog of war in 2022 and I’ll throw in some observations on psychology as well for good measure.

First on the psychology front: A classic big bear market rally emerges not only from deeply oversold levels, but also from extremely negative sentiment and positioning. That’s when the market voices keep screaming for more new lows at the lows and then they get their face ripped off as technicals demand their reconnects and shorts are relentlessly forced to cover. In process pessimism leads to optimism and people tend to chase higher prices at the wrong moment when the risk/reward is shifting again as now the voices scream bottom and are calling for new highs to come.

Keep reading this article on Zero Hedge - Blog.

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