Sentiment Speaks: Yet Another Bubble And Crash Article
- I can no longer count all the articles coming out calling the market names and expecting a crash.
- We are still in a bull market which can last a few more years.
- Once this current pullback runs its course, we are setting up for our next rally to 4300SPX.
- This idea was discussed in more depth with members of my private investing community, The Market Pinball Wizard. Learn More »
If I see another article calling this market a bubble, or that the crash is coming, or claiming that “the party is over,” I am seriously going to scream. But, I guess we should thank all these article writers as they are adding bricks to the wall of worry that we will climb in 2021.
I mean, have you ever seen a crash when everyone, and their mother, grandmother, uncle, aunt, and aunt’s cat knew it was coming? In fact, I got calls from many of my relatives asking me whether they should get out of the market since all they are hearing is that we are going to get a repeat of the March 2020 crash.
As an individual investor, you are undoubtedly bombarded by information throughout the internet. While some of it is bullish and most are normally bearish (as bearishness seems to sell better), it is quite a challenge to be able to distinguish the wheat from the chaff. Unfortunately, the great majority of the information resides within the chaff, and often causes investors to focus upon their fear more so than profitable information.
To this end, we began Elloittwavetrader a little over 9 years ago to help investors learn to distinguish between subjective perspectives and objective analysis of the markets we trade. Then a little over 3 years ago, we opened The Market Pinball Wizard on Seeking Alpha, and we immediately rocketed up to become the top 2nd or 3rd service out of 180+ services, even though we focus on Elliott Wave analysis. And, based upon the feedback we have proudly received from our members throughout the years, we have substantially succeeded in assisting our members to maintain on the profitable side of the market the great majority of the time.
In fact, during our last 9 years, we have grown to a total of 7000 members, and almost 1000 money manager clients. And, one of our money manager clients sent us this note within the last couple of days:
“My AUM has grown exponentially because of you and I can't thank you enough. My biggest regret is not signing up sooner! You've done more good than you will ever know.”
This same money manager posted a discussion he was having with one of his clients this past week. The client was asking him if this is going to become a crash like last year for which everyone now seems to be preparing:
Client: Is the market imploding?
Me: It's a C wave.
Client: But what about interest rates?
Me: It's a C wave.
Client: But what about the upcoming jobs report?
Me: It's a C wave.
Client: But what about China invading Taiwan?
Me: It's a C wave.
Client: But what about the senate holding up confirmations?
Me: It's a C wave.
Client: Wait, what's a C wave?
Me: Wait, China invaded Taiwan!?
Client: Just wanted to make sure you're listening, now what the hell is a C wave!?
And, if you also want to know what the hell a c-wave is, I penned the following 6-part series of articles outlining our methodology from theoretical and practical application perspectives:
- This Analysis Will Change The Way You Invest Forever - Part 1
- This Analysis Will Change The Way You Invest Forever - Part 2
- This Analysis Will Change The Way You Invest Forever - Part 3
- This Analysis Will Change The Way You Invest Forever - Part 4
- This Analysis Will Change The Way You Invest Forever - Part 5
- This Analysis Will Change The Way You Invest Forever - Part 6
Each day presents us with new challenges, and further tests us between buying into the predominant stories told throughout the financial media and the objective truth presented to us through price. After all, price is the absolute truth in the market. Yet, the undeniable lure of the predominant media narratives seems to have greater sway and impact, and often misdirect us toward the wrong paths.
In fact, if you remember how bullish everyone was one year ago as we were striking the highs. Yet, we remained quite bearish of the EEM to the point that I began shorting it in February of 2020. However, I was certainly scratching my head as to what the SPX was doing while EEM and IWM were still presenting quite bearishly. Moreover, my target for the short trade from the 45 region on EEM was in the 31 region (the a=c target presented on the attached charts below). And, as we now know, EEM not only struck my target, but slightly exceeded it by 1 point.
Even back in 2018, I was outlining to our members that the ideal target for the SPX for its respective 4th wave pullback was 2200SPX. And, when we finally were approaching that target in March of 2020, the mass fear driven by the media misdirected many investors to not only sell their positions when we were down there, but even had most looking much, much lower.
Yet, those that were following our work at the time knew quite clearly that I was not only buying down there, but I even noted in our trading room that I instructed my wife to put the cash we had in our children’s 529 plans back into the market, to which you can only make changes twice a year. In fact, the media-directed fear was so palpable, that not only did many of our members question the prudence of my buying back into the market, my wife even asked me “are you sure!?”
So, as I currently peruse the general media offerings as I write this update, it is hard for even me to remain unswayed by their lure of bearishness. Titles of articles being printed today include words like “bubble” and “crash,” which elicit fear in even the most objective of investors. That is why I strongly urge many of our subscribers to tune out the news and stop reading the false media perspectives, and to focus on the more truthful perspectives presented by price action.
If you have read my last few public articles on Seeking Alpha, you know that I am quite bullish for 2021. However, I have been waiting for a very specific market setup which will launch us to the 4300SPX region later this year. And, last week, I noted that if we are not going to get that set up soon, then the market may provide us with more of a pullback before we begin that rally.
Then, this past Tuesday morning near the market open, as the market was hovering around 3900SPX, I sent out an alert to our members letting them know that I did not like the structure being presented to us in the market, and that it was a good time to buy protection for a potential test of support below us. And, as we now know, the next day the market began to decline from the 3900 region to almost 3700SPX.
Overall, my perspective remains unchanged. Support in the market now resides between 3500-3675SPX. As long as the market maintains that support, I am still looking for that break-out setup that will launch us to the 4300SPX region as our next target for 2021. If you would like more detail on our expectations, you can feel free to join us for a free trial at The Market Pinball Wizard, as I posted a 3-page update on the market this past Saturday night. As one of our members told us on Friday: “I cannot stress enough how much this site not only changed my entire approach to investing, but my life as well. Game-changer is an understatement.”
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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