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Pastimes : Ask Mohan about the Market

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To: Barbara Barry who wrote (8293)11/17/1997 4:09:00 PM
From: Cynic 2005  Read Replies (3) of 18056
 
Barbara and all:
Re. emotions, the fear of missing out from possible further gains causes stocks to rise sharply. At the same time, the buyers have to be aggressive. I can't objectively assess the emotions behind today's sharp rise but I will give it a shot.
1. Sellers are showing the "fear" of missing out further gains.
2. Short-term and aggressive traders and some scared bears have done some aggressive buying.
Now, if group 2 becomes fewer and fewer in numbers, the "fear" changes hands. The buyers will then be afraid that the prices will fall and hence they will demand cheaper prices. The trading volume often indicates this.
Also, remember this - we are at a stage in the market when seemingly insignificant or unimportant news causes tremendous rise (or fall) in prices. I think we have seen that today. From what I learnt, it is a sell signal.
-Mohan
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