Ever since coronavirus been sensationalized by mainstream media it stirred up panic and chaos in average people who bought up all the hand sanitizer and toilet paper in retail. This combined with the massive selloff in the market left retail investors in a panic to sell. As most people are trying to run for cover I see opportunity on the horizon.
Most people are in fear as blood is on the streets and as shown above this may be a panic cycle. On the fear and greed index we haven’t reached the extreme fear and we maybe on our way. When finally there at extreme fear, most people won’t even touch the market while the very few will see the opportunity.
Average people will blame coronavirus for such crash, but is it really? Last September, the Federal Reserve started cutting rates by quarters and was expecting to be at zero by the end of election time. This indicated clear signs of economic slowdown. I personally am glad the market crashed as it is a new opportunity on the rise.
To take advantage of fundamental analysis, one needs to step back and look at the market from a objective point of view. Panic will cause one to make horrible decisions. The lesson being taught is to stop thinking like the herd and be one step ahead. When most people see negative news there action will do what they perceive to the right move with the majority. When i see negative news I look for what the reason is behind it and look for the opportunity opposite to what average person would do or think. Once you’ve mastered this psychology you will be able to determine which thought processes are by retail investors or by market makers. Goal is think like market makers.
The Truth 