This graph can be applied to currencies, equity markets, and even housing markets.
The cycle of market emotions: optimism, excitement, thrill, euphoria (maximum financial risk), anxiety, denial, fear, desperation, capitulation, despondency, depression, hope, relief, optimism
Retail Investors chase returns, buy and sell short term, and act on emotion. Institutional investors consider both return and risk, and invest long term with broad diversification.
I think for the Philippine Stock Market, we have slid from the Euphoria stage to the panic stage in just these three weeks. This week, America sets the tone as investors ponder their dwindling returns on the year, big events in the week ahead include the government's sometimes unpredictable payrolls report and quarterly earnings from heavy-hitters such as General Motors (Charts, Fortune 500) and Walt Disney Co. (Charts, Fortune 500).
Much more from cnnfn.com :
The payroll report will come at the end of a fairly heavy week for economic data. According to the median forecast in a Reuters survey of economists, nonfarm payrolls grew by 130,000 in July after a rise of 132,000 in June.
There are no major economic releases expected Monday, but Tuesday will be busy with new data on personal income, employment costs, the National Association of Purchasing Management-Chicago index, construction spending and consumer spending all on tap.
Tuesday will also bring the quarterly earnings report from General Motors. While Ford Motor Co.Charts, Fortune 500) surprised Wall Street on Thursday with its first profit in two years, analysts are expecting GM to report a profit of $1.09 per share, compared with $2.03 a year earlier. (
Others reporting this week include Walt Disney Co. on Wednesday and Procter & Gamble Co.Charts, Fortune 500) on Friday. Tuesday's report from the on Midwest business conditions from the National Association of Purchasing Management-Chicago is expected to show a decline in the index to 58.0 from 60.2. (
Wednesday has a report from the Institute for Supply Management on the manufacturing side of the economy, as well as data on pending home sales and reports by manufacturers on car and truck sales in July.
All these data again hinge on finding the delicate mix of "just the right amount of strength" to get equities out of the doldrums, with the balance of "just the right amount of weakness" to force the FED for a possible emergency meeting to cut rates and loosen credit.
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