Economic predictions. An investment newsletter makes general predictions about the economy to help their clients make sound investment decisions.

a) Recently they said that because the stock market had been up for the past three months in a row that it was “due for a correction” and advised their client to reduce their holdings. What “law” are they applying? Comment.

b) They advised buying a stock that had gone down in the past four sessions because they said that it was clearly “due to bounce back.” What “law” are they applying? Comment.