Sentiment Speaks: The Stock Market Is Going To Crash
- The wall of worry is certainly building.
- Levels to watch in the coming week.
- Understanding the bigger perspective in the market.
Well, everyone else has been calling for a market crash, so I thought maybe I should too. But, while I think the market will likely crash again, I don’t think it is going to happen just yet, as I still believe this bull market has several more years to run.
When I peruse the articles on Seeking Alpha, it seems to be en vogue today to be bearish. The headline articles discuss how the market has now moved into being a bear market, or that the VIX is about to skyrocket, or the market is overvalued, discussions of black swans, the impending debt crisis, etc.
Turn back the clock to early 2016 and 45% lower in the S&P500, and were we not reading the exact same articles?
And, of course, this time is certainly different. There are a whole new set of issues that we need to worry about, right?
I mean, are the issues with which we are now grappling much worse than what we faced back in 2016 and 2017 when the market saw one of its strongest rally in years?
Think about it. Are we dealing with anything worse than the cessation of QE, North Korean atomic threat, major terrorist attacks worldwide, Brexit, Frexit, Grexit, Trump election, rising interest rates, and many more I don’t even care to list.
Now, if you have been an active member of the market over the last several years, and you have not come to the realization that all these “issues” mattered not to the market as it continued to soar, then you have not been paying attention. All these issues are purely bearish noise which a prudent investor learns how to tune out. Rather, a prudent investor understands when this noise simply helps build that wall of worry which the market climbs.
Have you been a prudent investor these last two years? If not, don’t you think it is time to take stock as to what you did wrong, and how you can correct that in the future?
And, if you do not have the tools to recognize what is bearish noise then maybe you can come join us at The Market Pinball Wizard. We foresaw this rally years ago, as well as the correction within which we are now mired.
As to our immediate future, I am going to give you one number to watch in the coming week: 2645SPX.
As long as the market holds over 2645SPX early in the coming week, we are setting up to rally towards 2720SPX.
However, if the market breaks down below 2645SPX with an impulsive 5-wave structure, then we will be setting up to drop to the 2530-2555SPX region over the next week or so.
Now, for those who are going to read this article, and view this as my being indecisive, I want to remind you that my job is to give you guideposts to understand which path the market will take in the coming week. Anyone who can tell you with certainty what the market WILL do is truly clueless about how non-linear markets work.
Moreover, when you understand that the market has been mired within a 4th wave correction (the most variable wave within Elliott’s 5-wave structure), then you understand we are not yet set up for the trending move, as whipsaw will likely continue to be the name of the game.
For the last several months, the stock market has been desperately trying to shake both the longs and the shorts out of their positions. But, this is nothing new to those who understand how 4th waves take shape.
Once the market dropped in February down to our target for this 4th wave between 2424-2539SPX, I expected a rally to take us back over 2720SPX. After the rally back up to as high as 2800SPX from the 2532SPX low, I noted that the easy part of this 4th wave was likely done, and the action will likely become much more complex from that point forth. And, the market as certainly been much more choppy since that time.
And, as I noted during the week to my members of The Market Pinball Wizard, seasoned and experienced traders find huge value in understanding where we are within the market structure, as they reduce the number of trades they do during a 4th wave, in addition to reducing the amount of risk they are willing to accept during a 4th wave.
But, understanding that we are in a 4th wave also suggests that there is likely another rally around the corner; the 5th wave. So, I still expect that this market will see another rally, potentially into 2019, which takes us over 3000 in the SPX.
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This article was written by
Avi is an accountant and a lawyer by training. His education background includes his graduating college with dual accounting and economics majors, and he then passed all four parts of the CPA exam at once right after he graduated college. He then earned his Juris Doctorate in an advanced two and a half year program at the St. John’s School of Law in New York, where he graduated cumlaude, and in the top 5% of his class. He then went onto the NYU School of Law for his masters of law in taxation (LL.M.).Before retiring from his legal career, Avi was a partner and National Director at a major national firm. During his legal career, he spearheaded a number of acquisition transactions worth hundreds of millions to billions of dollars in value. So, clearly, Mr. Gilburt has a detailed understanding how businesses work and are valued.
Yet, when it came to learning how to accurately analyze the financial markets, Avi had to unlearn everything he learned in economics in order to maintain on the correct side of the market the great majority of the time. In fact, once he came to the realization that economics and geopolitics fail to assist in understanding how the market works, it allowed him to view financial markets from a more accurate perspective.For those interested in how Avi went from a successful lawyer and accountant to become the founder of Elliottwavetrader.net, his detailed story is linked here.
Since Avi began providing his analysis to the public, he has made some spectacular market calls which has earned him the reputation of being one of the best technical analysts in the world.
As an example of some of his most notable astounding market calls, in July of 2011, he called for the USD to begin a multi-year rally from the 74 region to an ideal target of 103.53. In January of 2017, the DXY struck 103.82 and began a pullback expected by Avi.As another example of one of his astounding calls, Avi called the top in the gold market during its parabolic phase in 2011, with an ideal target of $1,915. As we all know, gold hit a high of $1,921, and pulled back for over 4 years since that time. The night that gold hit its lows in December of 2015, Avi was telling his subscribers that he was on the phone with his broker buying a large order of physical gold, while he had been accumulating individual miner stocks that month, and had just opened the EWT Miners Portfolio to begin buying individual miners stocks due to his expectation of an impending low in the complex.
One of his most shocking calls in the stock market was his call in 2015 for the S&P500 to rally from the 1800SPX region to the 2600SPX region, whereas it would coincide with a “global melt-up” in many other assets. Moreover, he was banging on the table in November of 2016 that we were about to enter the most powerful phase of the rally to 2600SPX, and he strongly noted that it did not matter who won the 2016 election in the US, despite many believing that the market would “crash” if Trump would win the election. This was indeed a testament to the accuracy of the Fibonacci Pinball method that Avi developed.
Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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