S&P 500 Pattern Hints at Move Beyond 4600 This Week
The market presents investors with a game based in psychology. However, most market participants are much too interested in what the Fed is doing, or what the CPI is going to be, or what unemployment will do to the market to even realize they are not playing the right game. In other words, while the market is playing a game of chess, most market participants are playing a game of go-fish.
I think a market psychology study published back in 1997 probably explained this best:
“Stock markets are fascinating structures with analogies to what is arguably the most complex dynamical system found in natural sciences, i.e., the human mind. Instead of the usual interpretation of the Efficient Market Hypothesis in which traders extract and incorporate consciously (by their action) all information contained in market prices, we propose that the market as a whole can exhibit an “emergent” behavior not shared by any of its constituents.
In other words, we have in mind the process of the emergence of intelligent behavior at a macroscopic scale that individuals at the microscopic scales have no idea of. This process has been discussed in biology for instance in the animal populations such as ant colonies or in connection with the emergence of consciousness.”
Yet, most continue to turn over one rock after another to find the singular factor that they believe will cause the market to move one way or another. And, if you read article after article, you realize that authors continue to guess as to what that one factor will be that will drive the market.
But, it seems that no matter how many times they get it wrong, they still do not take a step back and question their analytical methodology. So, their next article is the same attempt
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