Bob Farrell
Bob Farrell is a Wall Street legend best known for his “10 Market Rules to Remember,” timeless investing principles shaped by his nearly 50-year career. As the longtime Head of Market Strategy at Merrill Lynch, Farrell earned universal respect for his market wisdom and ability to interpret cycles and investor psychology. He was the Founder and first President of the Market Technicians Association (now the CMT Association), helping to professionalize the field of technical analysis. A pioneer in sentiment analysis and market forecasting tools, Farrell consistently ranked among the top strategists in Institutional Investor for his accuracy in market timing. His rules and insights remain highly influential today, often cited during times of market volatility as guiding principles for both institutional investors and individuals.
Bob Farrell Professional Experience / Academic History
Professional Experience
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Chief Market Analyst and Senior Investment Advisor
Academic History
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Master's Degree, Investment Finance
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Bachelors Degree, Economics and Finance
10 MARKET RULES TO REMEMBER
Markets tend to return to the mean over time.
Excesses in one direction will lead to an opposite excess in the other direction.
There are no new eras – excesses are never permanent.
Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways.
The public buys the most at the top and the least at the bottom.
Fear and greed are stronger than long-term resolve.
Markets are strongest when they are broad and weakest when they narrow to a handful of blue-chip names.
Bear markets have three stages – sharp down, reflexive rebound and a drawn-out fundamental downtrend.
When all of the experts and forecasts agree- something else is going to happen.
Bull markets are more fun than bear markets.
MERRILL LYNCH
Bob Farrell spent 45 years at Merrill Lynch, serving as Chief Market Analyst and Senior Investment Advisor, where he became one of Wall Street’s most influential strategists.
Beginning in 1971, he authored the firm’s widely followed Market Analysis Comment, distributed to institutional and individual clients worldwide.
As head of market analysis, Farrell pioneered the use of sentiment indicators derived from Merrill Lynch’s internal data and developed innovative technical tools, including the Farrell Put/Call Ratio and the Farrell Three-Year Cycle, both of which remain influential in market forecasting.
MARKET SENTIMENT
Widely regarded as a pioneer in behavioral finance and sentiment analysis, Farrell was one of the first Wall Street strategists to emphasize the role of investor psychology in driving market trends.
He was also the first to formally use the term “sentiment analysis” to describe psychological market indicators—a methodology that has since become a cornerstone of modern investing.
Known for his ability to anticipate market turning points, Farrell’s contrarian approach and focus on crowd psychology helped redefine how analysts and investors interpret shifts in stock market direction.