What we will cover in this chapter
Major bull and bear market cycles can be broken down into the psychological perception stages of the move as price action influences investor sentiment.
Disbelief/dismissal – during a base formation, characterised by lengthy ranging following a decline, expectations of upside potential deteriorate. The received wisdom for many people will be that bull markets are gone for good and anyone expressing an optimistic opinion is considered maverick or delusional. To the extent that people have positions, they tend to be small because of the high perception of risk.
Acceptance – prices have been rising for a while and people are beginning ...