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Another one of the many old adages in the stock market (our ‘paraphrasing’) claims that ‘bear markets don’t completely end until every last bull has thrown in the towel’. The stock market psychology in 2011 seems very close to that as strategists, investors and market commentators have become more bearish as the year has gone on, issuing negative outlooks for global growth, stock and commodity prices. If on any particular day we see 3 pieces of positive financial news and 1 piece of bad news, it seems a given that investors will focus only on the negative news. In fact, even with the plethora of better economic news coming out of North America over the past few months, more of the commentary seems now to question the legitimacy or accuracy of those numbers, suggesting that ‘if it’s good news it has to be wrong.’ And if the data can’t be challenged, then the commentary quickly revolves back to the ‘financial crisis in Europe’.
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