Who should be blamed?

The market has enormous volatility and has killed bulls a few times in the past 2 months after seemingly showing very bullish moves. So who to blame for the sudden declines? It’s indeed very convenient to pinpoint a specific cause for a crash and each time you for sure can find something to blame. This time, I'm sure a lot blame could go to Trump's trade war with China. But is this the way to follow the trend of the market? Not for me. In reality in my opinion, the market's volatility is very much herd’s sentiment driven.  As a matter of fact, when the market is overbought with a too hyper sentiment, it is vulnerable to a downside risk. When it is in this situation, it will always find some excuse to sell. For this time, even if not Trump's tariffs, it would be something else to trigger the selloff. Similarly when in the oversold condition, it will find excuse to buy when on one is interested to do so. If you follow me for the past couple of months, you know I have mapped out the possible path of the market moves with fairly accurate callings. I of course didn't know weeks before that Trump's high tariffs were coming or any other headline news that triggered some selloffs,  but the TA that reflects the herd behaviors and sentiments does help me to make reasonable prediction. For sure no one can make calls right all the time but at least I feel more comfortable to follow my contrarian calls than trying to figure out what is coming that may trigger buys or sells.


For fun, let me show you the FB chart that has provided a great early warning sign months before the current sharp selloff. Below is the weekly one year chart for FB. FB had a great run in the past year with new highs one after another until early Feb this year. But since last Sep, actually its weekly chart has started to send out warning signals. The green circle for the weekly MACD has started to trend down since then and intensified after Dec. The chart certainly cannot tell you that some scandals are coming for FB but it has kept warning that some troubles may be coming for FB. Anyone aggressively buying FB after it recovered from its Feb low is definitely feeling the pain now. TA of course is not science that can give us 100% accuracy but it does provide useful insights that may not be so obvious weeks before the situation plays out.