Quote Originally Posted by Lizard View Post
Though taking a whole-of-market point of view, it isn't possible for everyone to be getting in and out. Surely, over time, this behaviour contributes to more volatility, with moves becoming ever more dramatic and self-fulfilling until it becomes too fast to trade and reversal occurs (i.e. buy falls, sell rises)... although, perhaps more likely that it just reaches the point where large majority just put sharemarket in the too-hard basket and end up with lack of liquidity, wide spreads and barely a pulse?
Ultimately that is what happens at the end of a secular bear market .... total lack of general interest ... boring boring ... all to hard ... and only the serious investors (not traders) are left to pick up the bargains

Simplistic view and no doubt more traders / shorting / derivatives upset the norm (historical perspective) but you are about right with your prognosis