Contrary opinion theory
At times it pays to be contrary. Because this chapter is about not doing what the losers do, which generally is what the majority is doing, this is a good time to introduce the contrary opinion theory. The concept is simple: If all the bulls have already bought, there are no bulls left to buy, and the market falls of its own weight. If a piece of bullish news fails to move the market up, this is your clue. When all the bulls decide to run for the exit door, there will be no cushion of new buyers to soften the decline, and the decline will be particularly severe. The reverse is true if “all the bears” have already sold.
The father of contrary opinion is recognized to be Humphrey Neill, who published The Art of Contrary ...
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