The Market’s Favorite Trick

The market is made to fool the majority most of the time.

That line from Reminiscences of a Stock Operator has aged better than any economic model I’ve ever seen.

(I can’t remember the exact quote as all my books are still in boxes from the move but you get the idea.)

You can apply it to nearly every cycle, especially the one we’re in now, where everyone seems eager to call a “bubble.”

Here’s the thing: when the majority is openly warning about a bubble, it usually isn’t when the bubble bursts.

Tops rarely form amid loud debate and public skepticism.

As Tim Hayes wrote in The Research Driven Investor,

“Tops, on the other hand, are typically reached after extended periods of divergence and distribution, with hardly a whisper of concern to be heard in the midst of all the quiet complacency.”

That’s the key.

True bubbles end not in fear, but in silence.

When no one’s worried. When everyone believes the rise is deserved and permanent.

Today’s constant bubble chatter tells me the opposite.

If everyone’s talking about it, it’s probably early.

Think about the psychology.

People only yell about bubbles once they’re already out.

It gives them the setup for an “I told you so” moment later.

For most, that’s the goal....to feel validated.

And that’s where most investors miss the point.

They get what they want from the market.
Some want excitement.
Some want to be right.
Some want to sound smart.

I want profits.

Ok — now let’s pretend this is a bubble.

Saying it is doesn’t magically make it end.

Markets don’t collapse on angry men yelling at them, they collapse on price.

For any bubble to pop, price has to stop going up, then follow through to the downside.

That’s how a countertrend move becomes a new primary trend.

Until then, calling it a “bubble” is just identity politics for the market.

When do you get out?
How do you know it’s over?
You see, anyone can yell a problem without offering a solution.

It's classic engagement bait disguised as wisdom.

Unfortunately, it works on the masses and annoys the educated.

The reality is, most bubble doomers make their money talking about bubbles, not trading them.

Yes, you can always find statistics that “prove” we’re in a bubble.

That’s the double edge sword of data — it’s so abundant you can find anything to support any view.

It’s like sports talk radio: every fan can find a number to prove their team’s the best.

Price and trend are the only things that pay.

They’re the scoreboard.

Until the tape confirms otherwise, the market is innocent until proven guilty.

Anyways, that’s my two cents.

All Gas No Brakes | Ep. 3

I became a technician because I love charts.

They’re the language of the market, so most of my time is spent ripping through hundreds of them, decoding the message.

What I don’t love?

Sitting through “stock shows” where three charts get dragged out over an hour while the hosts wander into everything but the market.

There’s a place for that. Just not here.

So I’m fixing it.

This week is All Gas No Brakes - my favorite show to run.

20 charts. 20 minutes. That’s it.

No pontification about the future.
No hot takes for a soundbite.
Just 20 setups you should be paying attention to.

I’ll be doing this once a month since the first one was such a hit.

Set a reminder, catch it live, or watch the replay on YouTube.

If you want more charts in 20 minutes than most shows manage in 20 hours, tune in.