Investor Psychology: Shark Attack

September 15, 2023, 3:21 pm EDT

Shark Attack

Shark attacks occur when a person is least expected. When a swimmer or surfer enjoys a good time in the beautiful ocean, a big white shark comes to give a fatal bite. 

Similar scene could happen in the stock market for its participants. Particularly, when the stock market seems to be firmed moving in a direction, it could change suddenly to the opposite direction. 

Therefore, it is essential for the market participants to be alert at all times. More importantly, prepare for any unexpected circumstances. 

Today could be a good example. A day after strong market with Arm (ARM) successful IPO launch. Technically, the Dow Jones stock market also made a good setup for breaking out as we published yesterday 09/14. Obviously, yesterday’s momentum to the upside was wiped out by today’s loss: DJIA -0.8%, S&P -1.1%, Nasdaq -1.5%

Another bearish sign is that precious metal gold and silver began to move up. Usually, it is a signal to be alert. 

We simply need to accept the fact market can change direction any day with or without a reason. 

The inflation threat with higher gasoline price, Russia and North Korea alliance, China’s unstable conditions, and potential risk of another COVID-19, are some of the possible causes. But, it could be combinations or others to trigger any shock to the stock markets. 

Nobody knows the future. But, if we prepare for the unexpected, then we could act quick enough. In the investing world, it means to protect our assets and capitals.

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