Sentiment Speaks: Market Levitation Will Likely End Soon

Summary

• Most articles are written from a perspective of almost certainty.
• Markets are non-linear, probabilistic environments, and should be treated as such.
• I think we see a pullback before we are ready to head to 4300SPX.

The certainty with which others write about the market has always astounded me. Do they have a crystal ball? Do they own a time machine? Do they own an almanac from the future?

While there are some that misunderstand my perspective in the market and claim that I'm saying that the market will either go up or down, I only look at the market from a perspective of probabilities. Therefore, everything has to be approached with “if/then” perspectives.

In simple terms, we provide our perspective by ranking probabilistic market movements based upon the structure of the market price action, which tracks market sentiment. And, if we maintain a certain primary perspective as to how the market will move next, and the market breaks that pattern, it clearly tells us that we were wrong in our initial assessment.

Our successful market guidance throughout the last decade is the main reason we have grown to almost 9,000 members in all our services (with almost 1,000 money manager clients), have three services in the top 20 within the Seeking Alpha Marketplace out of a total 190 services, along with 70,000+ followers on Seeking Alpha and an average follower to article ratio among the highest on the platform. When you consider that our market perspective is primarily based upon Elliott Wave analysis, it highlights and accentuates our accomplishment on a fundamental analysis website based upon our history of accuracy.

But here is the most important part of the analysis: We also provide you with an alternative perspective at the same time we provide you with our primary expectation, and let you know when to adopt that alternative perspective before it happens.

As I have said many times before, this is no different than if an army general were to draw up his primary battle plans, and, at the same time, also draws up a contingency plan in the event that his initial battle plans do not work in his favor. It is simply the manner in which the general prepares for battle. We prepare for market battle in the same manner.

As our members have noted:

“Avi your MPW allows me to see the market in a whole new light. It’s like everything slows down, and you have the ability to make decisions that up until now were not available to me. Your system lets me know quickly that my bias/direction is incorrect, allowing to make adjustments saving me thousands. This morning it allowed me to take a 20% profit. Thank you for your commitment as well, your updates are always so timely.”

Again, while I will never be able to tell you with certainty how the market will move in the coming weeks, months, and years, I present you with enough information to know where my primary perspective is wrong so that you can adjust in order to take account for the alternative situation. And, until such time that the market proves our primary perspective is wrong, we will continue to follow our primary perspective, which has been guiding us extraordinarily well for many years.

By now, I hope you recognize the difference in our analysis approach other than the accuracy thereof. We strive to view the market, and utilize our mathematically based methodology, in the most objective and intellectually honest fashion as possible, no matter how crazy it may sound. Moreover, it provides us with objective levels for targets and invalidation. So, while we are certainly not always going to be right, when we are wrong in the minority of circumstances, we are able to adjust our course rather quickly, rather than fighting the market like many others you may read. So, you will never hear from me that “the market got it wrong.”

And, that is why I still struggle when I read articles that are presented as though a specific occurrence or market movement will be a “certainty.” This is even more problematic during what I consider one of the most difficult market environments we have seen in over a decade. But, most of the people that many consider to be accurate today are the same ones who have maintained a bearish bias for many years before. But, histrionics aside, I'm not sure how a perma-perspective can be appropriate in any environment.

So, allow me to tell you what I'm seeing based upon our mathematical, probabilistic perspective.

Currently, the market is hitting its head on the 4030-50SPX resistance region. Above this resistance, we have the 4118-4154SPX region. While I still maintain a primary expectation that the market will ultimately next rally to the 4300SPX region, I'm looking for a pullback before we are able to generate the energy for the next rally to move through the 4118-4154SPX resistance region.

Therefore, my expectation is that the market will still test the 3700-3830SPX region. And, clearly, we need to see a sustained break of 3906SPX to make that a high probability. Ultimately, as long as the market pulls back in a corrective fashion and holds the 3700-3830SPX support region, then I will be looking for signs of a developing rally off that support which will target the 4300SPX region next.

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