Sentiment Speaks: How Did I Know We Would See A 2% Down Day In A Bull Market?

Price action over the prior week
With the market remaining below our resistance of 2410SPX, we expected a drop towards 2330SPX. This past week saw a drop which bottomed within 20 points of our target region.
Anecdotal and other sentiment indications
In my never-ending quest for outperformance in the stock market, I am still bewildered by those who follow news as their triggers to buy or sell.
Now, while I can point to specific events which have confounded those looking for a market “crash,” such as the French terrorist attacks, or Brexit, or the Trump election, it seems people simply do not learn their lessons that you cannot glean market direction from news. While it may act as a catalyst for a market move, the substance of the news will not provide you a directional bias, and, many times, will even have you looking the wrong way.
Again, each of the examples I have presented above caused most market participants to be looking the wrong way, as the market continued its march higher towards our long-term bull market targets. You see, the market really does not care about the news. Only people who need a “reason” for what they want to do care about the news. But, markets are not reasonable. Markets are emotional.
Consider what Ben Franklin said hundreds of years ago:

This post was published at GoldSeek on 25 May 2017.