In his latest tweets, Mr. Tapiero stated that today's stock market sentiment touched the level of 0, or 'Extreme Bearish' ('Buy'). In terms of market psychology, this translates to 'Extreme Fear'.
Enough Blood in the Streets
The undisputed expert compared the ongoing depression with the painful drop of 2008 and highlighted that nowadays, the losses are extremely sensitive. According to Tapiero, the crisis that happened about 12 years ago 'looks like a little dip' from his point of view.
No capitulation?? Some have suggested in previous thread that there is currently not enough "blood in the streets." Perhaps, but on this metric, 08 looks like a little dip. Plenty of fear and "blood" accompanied this liquidation. Rates staying at 0, gold and #Bitcoin to benefit. pic.twitter.com/5hHzFCtQyb
— Dan Tapiero (@DTAPCAP) April 3, 2020
Only two assets may benefit from this carnage - Bitcoin (BTC) and Gold.
Mr. Tapiero also outlined that this situation may act as a good basis to 'buy' since the bottom could already be in:
Buying things at 0 has worked out pretty well for me in the long term.
Big Fear May Turn to Big Greed
While the trading community is still lacking the consensus on whether the Fear & Greed indexes come from the stock analysis work for cryptocurrencies, this is the first crisis that these indicators were in the spotlight for both sectors. The alternative Fear & Greed quotation for the crypto markets is recovering rapidly from the sub-10 zones.
While this crypto trading index touched the five-point level after the tumultuous Black Thursday, it is now about 12 points for the last two weeks. However, it is worth noting that it was 'Neutral' only five weeks ago.
This depression is confirmed by the accuracy of the 'Amygdala Overdrive Relationship' law for crypto-stock correlation, which was designed by Charles Edwards of Capriole Investments. According to the law:
When markets are in Extreme Greed: investors are attracted to risky assets and Bitcoin performance correlates with equities, or when markets are in Extreme Fear: investors dump risky assets and Bitcoin performance correlates with equities.
Mushumir Butt
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Yuri Molchan
