Survey Says: Buy Stocks! Sell Gold! Sell Bonds!

December 24, 2019

In my opinion, the reason people have been so bearish towards stocks and fighting strong trends is because they're allowing other biases influence their decision making. Whether they don't agree with the Fed, or the Trump, the direction of the Economy, or whatever it is, they're choosing to give more weight to these "opinions" than they do to price itself.

Fortunately for us, we're 100% data driven. So we don't care who the president is. We ignore everything the fed says and does. We assume anything a journalists creates is gossip, whether it is or isn't. And we certainly don't have time to care what the economy is doing.

So because we are so trained to focus on actual data, it's a lot easier for us to ignore those whose job it is to distract us. It's not "easy", but it's definitely easier for us as technicians than it is for most of society. The fact is most people are unaware, or choose not to care, that they're consuming content produced by those with ulterior motives. They're just here to sell ads to their sponsors while we're only trying to make money in the market. It's a big difference, and it becomes a problem.

So what we do is try to eliminate those biases and remove them from our decision making process entirely. I asked this question on Twitter this week and purposely took out the x and y axis so that we can focus on just price alone:

We got a variety of comments and opinions, and you can find those on this thread.

But for me, what stands out is the poll itself: 85% of respondents want to be buying these charts:

Here is the revealing of this mystery chart which makes a lot of sense.

I obviously think we need to be buying stocks and that we're closer to the beginning of a new bull market than we are to the end of an old one. See here and here.

And if investors focus on just price alone, as they're doing above, they're just as bullish as we are!

What's interesting is that the sentiment data we get is not suggesting the same type of upside conviction for stocks that we see in our unbiased poll.

The top one is the S&P500 vs Gold and the bottom is the S&P500 vs US Treasury Bonds.

Stocks are breaking out on a relative basis and we want to be buyers, not sellers. Anyone focused on just price alone agrees with that as well. It's that noise being made by the professional distractors that has you, shall I say, distracted.

Price pays. Nothing else.

So we begin and end our entire process with the study of price. Why wouldn't we?

If we're above those trend lines we've all agreed are bullish, how can we not be buying stocks and selling the others?

Let me know what you think!