We are pattern-seeking little mammals. Evolution has made us that way because we cannot evaluate every new situation ab initio. The sabre toothed tigers were too fast for that.
The psychologists tell us that our inclination to find patterns causes us to see patterns in random historical data. That is the essence of technical analysis, which is basically astrology for investors.
The OP chart is one explanation of history. There will be many others with no way to tell which is correct. Useless, IOW.
Yup. If it doesn't go up, don't buy it.Sounds easy. Avoid the fake recovery.
I agree we seek patterns. And I tend to always ignore all the two hundred day moving average, “support”, etc methods.
But I find it fascinating that pretty much in every bear market there is kind of a fake recovery that usually happens multiple times. I don’t know if it is human nature or whatever, but it seems to happen during each bear market at some point.