Market Pundits and their Punditry

These are the few phrases that the stock market commentators/self-styled pundits use in the TV/websites.  You are likely to encounter many of these phrases if you watch any of the English business channels during any trading day anywhere in the world.

It is a sell on every rise market.  This phrase is used in the bear market scenarios and/or when the market is not showing any definite upwards trend.  This phrase is meaningless because nothing definite is being said.  “On every rise” does not mean anything, so whenever the market falls from whatever level, the pundit/TV anchor says “we told you so.”

It is a buy on dips market.  This phrase is used in a bull market scenario and the same logic as above applies as in the above scenario.  The reason being even in a bull market, the market can dip by as much as 20% and then resume its uptrend.

There is lots of cash waiting on the sidelines.  This phrase is used especially while justifying the phrase “buy on dips.”  If one thinks a little, one will realize that when a guy sells a stock, he gets cash in lieu of it and when one purchases a stock he gives cash in lieu of it, so isn’t cash always in the sidelines i.e., from buyers pocket to sellers pocket.  If you mean new money, it is again a useless statement because the same pundit is using the phrase “trade with the trend” if the trend is down why will new money come?

Trade with the trend.  This is again in hindsight you know what the market has already achieved (upward or downward) and the trend can change in any direction at any moment and there is every chance that you get caught in the wrong foot, especially in the times of algorithmic trading/high frequency trading.

We are in the bottom formation zone/we are in bottoming up process.  These phrases are used when one is not sure what the markets will do, i.e., if it falls more the pundit is correct and if the market stabilizes still the pundit is correct and if the market goes up, the pundit is still correct.  In brief, this statement means nothing.

The market is topping up and can plateau if no new triggers are coming.  First trick used here is the word plateau and not abyss.  Again, means nothing as the pundit will be correct whatever the market does and as a caveat any event can be made to sound as a trigger if the market goes up by more than 5%.

The market is overbought/oversold.  This is a stupid line because for every trade in any market (stock, commodity/currency), there are two sides one guy is buying and the other guy is selling, so the market technically cannot be oversold or overbought.

Market is going up because there are more buyers than sellers or market is going down because there are more sellers than buyers.  This again means nothing as in the overbought/oversold statement, there are never more buyers or more sellers.  For a trade to happen at any given price there has to be one buyer and one seller.  There will always be more buyers at a lower price and more sellers at a higher price but for a given price there will be only one buyer and one seller for a trade to happen.

The low hanging fruits have been plucked/Easy money has been made.  These phrases are interchangeable and mean the same thing.  Literally this phrase means targets or goals which are easily achievable and which do not require a lot of effort has been achieved.  This phrase is used by the pundits when the markets (stock/commodity/currency) suddenly go up a lot (5% or more).  It is meaningless because it is a statement that everybody can make with the benefit of hindsight.