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The Linguistics of Capitulation

    When a mania dies, however obvious the turning point is on the charts, the enthusiasm does not die at once. Even if the enthusiasts are momentarily cowed by a huge counter-move, their enthusiasm but slumbers, awaiting validation (any validation) of their prior beliefs. 
   And so we tend to get a certain stair-step progression of acceptance in discussions.

  The first stage tends to be, for lack of a better term, denial. The failure of market action to confirm popular expectations is stated to be the result of manipulation by non-market forces and unsustainable, therefor there is no reason to reassess those underlying expectations. (This is pretty much where we are in silver right now)

   Then comes patience. The reversal is stated to be a correction within a larger trend (= the expected trend), a "healthy" thing, a buying opportunity, and will reverse itself shortly.
    As new highs fail to appear, this patience gets extended. Fundamentals are appealed to, to reassure that the desired trend must reassert itself. (Ah, fundamentalism – the last refuge of the scoundrel)
   Needless to say, any upward moves at all in this period are greeted with great celebration.
   (I think this is where we are in petro at the moment)

    Gradually, though, reality will seep in. The prior rise will come to be seen as overdone, "ahead of its time". The "correction" of that trend will be seen as inevitable, but probably overdone as well. A return to some 'mean' is postulated . . . and so there is an excuse for inaction.
    The new trend will only be acknowledged after it has been manifestly present for some time. And it will, at first, mostly be acknowledged by those proclaiming its prompt end. These bottom-callers will have various justifications for their positions, some technical, some fundamental.
   Then comes the realization that nobody seems to know When this reversal will end, and that the risk is truly unknown. Fear leads to selling, which leads to more fear. Authority i appealed to, do "do something", and (empty) promises are made. 
    (This is where we are in real estate [except for the Calafia Beach Pundit, who is always a trifle behind, bless his little heart])  
    Finally, there is a true capitulation, as the public that once thought a particular market was a good place to be, firmly decides that it is not, and looks away. Most of the sellers have sold, so the that market can rise again.

    I saw every bit of this in the decline from 2008, but I must acknowledge the works of Robert Prechter, who opened my eyes to this sort of thing . . . and allowed me to make a handsome profit off of it, to boot!