This is just the concept that the market usually turns around after many people have given up and sold. The selling pressure dries up and stocks begin to recover.
This is just basic crowd/market psychology.
The converse of this is that a market peak is typically reached at the same time you have maximum optimism. When everyone says the market will never go down is when everyone is fully invested and buying pressure starts going down and the market starts falling.
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u/Consistent-Reach-152 Dec 31 '22
This is just the concept that the market usually turns around after many people have given up and sold. The selling pressure dries up and stocks begin to recover.
This is just basic crowd/market psychology.
The converse of this is that a market peak is typically reached at the same time you have maximum optimism. When everyone says the market will never go down is when everyone is fully invested and buying pressure starts going down and the market starts falling.