As Warren Buffett believes, “Be brave when others are afraid, and afraid when others are brave.” And he's on to something. Fear sends investors into an emotional tailspin. They start thinking irrationally, and they begin to sell when they should buy. But if you know how to take advantage of that herd mentality, making money couldn't be easier.
Heck, over the last 30 days, we've raked in 1,057% in total gains, closing out 17 straight winners... all while the market lost 1,000 points.
You see, if you know when fear or greed reach that unsustainable extreme, you give yourself a greater chance of calling turning points. Eventually, the fear subsides; at the point where fear tops, the stock becomes oversold.
That's where turnaround signals appear, hiding at the bottom of trends, waving that it's time for a reversal.
We're not talking about the VIX here... We're talking about the put-call ratio (PCR), most often used by options traders (it can be used with stocks, too).
By Ian Cooper