investor psychology

The technical signs suggest we're at a crucial point for stocks: Either a decisive rise or a dramatic fall is coming. And if you're the type to dismiss technical analysis as unscientific voodoo, you're missing the point: It's not about pattern matching, it's about human psychology.

Whether it's the "irrational exuberance" of the last decade or the apocalyptic view that prevailed last winter, investor psychology tends to be shortsighted and veer toward extremes. But investors need to overcome myopia and getting lost in the moment, Michael Mauboussin, the chief investment...