Hi ahhaha; Market stability is due to limit orders, which is what the fundamental players tend to use. Their reasoning is something like, "XXX has assets worth $$$, so I'll buy as much as I can for 2/3 of that."
The momentum investors, by the very definition, tend to buy the highs and sell the lows, making them more extensive.
This assumes that the bear market ends in a lack of interest rather than a panic. Panics are different. But generally, the problem with our market is too much emotion, not enough rationality. Too much pricing things because of the price of things, not enough pricing things based on their ability to pay dividends. I guess dividends would be another reason for stability at bear market bottoms, but we have to drop a long, long, long way before we see that...
-- Carl |
