Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

The S&P 500 Is Headed Over 3000

Stock-Markets / Stock Market 2017 Oct 17, 2017 - 02:13 PM GMT

By: Avi_Gilburt

Stock-Markets By Avi Gilburt : Many will simply read the headline to this article, and use it as support for their belief in the market striking a multi-year top right now. I mean, aren’t headlines like this proof that the market is overheated?

Well, the answer is a definite “sometimes.” You see, back in 2015 and 2016 I was writing articles with headlines saying that we are going to target the 2500SPX region. And, if you thought that those headlines were portending the end of the bull market, then you were clearly wrong. So, consider, maybe this headline is prescient rather than a contrarian signal.


While it is quite profitable at times to be a contrarian in the market, at other times it is downright dangerous. When you are standing in front of a bull who is charging ahead at full speed, you either get gored or trampled. The key is to know when the time is ripe to be a contrarian rather than simply being a contrarian because you “feel” the market is too high.

And, I am quite certain you have read all the articles constantly being published about one matrix or another that presents the “bear case” as to why the market will top today. The problem is that those articles have been published EVERY day for the last year and a half. But, since bearishness sells, we can understand why they are such click-bait, and will garner heavy hits for those writing such articles. And, Seeking Alpha is clearly not immune from such writers. The problem is that they do not serve investors well.

Remember what Keynes said: “The market can remain irrational longer than you can remain solvent.” But, more correctly, the market is always irrational. It is not based upon “logic,” or else one would engage the services of a logician to prognosticate market direction. Consider when was the last time you saw a logician identify a turning point in the market?

Currently, I am seeing more and more people believing that this current rally will simply continue unabated. As the market continues higher, their bullish calls become stronger and stronger. This is simply how market sentiment works. So, rather than expecting a crash, many are moving towards the belief that nothing will stop this stock market, since no negative “news” has been able to put a dent in this rally.

“From a purely technical point of view, if a bear market is born this month it would have to be considered the result of some sort of ‘immaculate conception,’” wrote Doug Ramsey, chief investment officer of the Leuthold Group.

Ramsey cited a “remarkable level of bullish ‘agreement’ across the U.S. stock market” for his positive views on the market, which he said “stacks the odds heavily against an imminent cyclical top,” although he said that it was still possible that stocks saw a “short-term setback.”

Well, when was the last time that a remarkable level of bullish agreement has led to a major rally continuation? If the money managers are “all-in,” I am not sure there is a lot of upside left in this market before we finally see a multi-month pullback or larger consolidation.

Several years ago, we set our target for the S&P500 between 2537-2611. While it may not seem like such a stretch of the imagination right now, consider that the market was in the 1800 region at the time we set this target, and most market participants were awaiting the certain market crash just around the corner. In fact, we maintained our strong conviction for this rally to 2500+ no matter who won the election in 2016. And, the fact that Trump won and we still rallied, despite most expectations to the contrary, supports our larger degree perspective.

But, now, we are in what we consider a “topping” zone. While the market can still push higher by another 50 points or so, I think we will be moving into a multi-month pullback as we move into 2018.

I have attached my long-term chart, which I have posted publicly on occasion over the last several years. And, for those that recognize it, you will know it has been quite an excellent road map for the US stock market. In fact, while many were calling for the “crash” back in early 2016, this chart was pointing straight up towards the 2500+ region.

Ultimately, this chart suggests that we will not likely see a 15%+ correction in the market until we complete waves (4) and (5). But, even after a 15%+ correction, which seems to be setting up for 2019 (just in time for our next Presidential election), the market will likely be heading higher into the early 2020’s, and will likely eclipse the 3000 region no matter who is elected President in 2020.

See charts illustrating the wave counts on the S&P 500.

Avi Gilburt is a widely followed Elliott Wave technical analyst and author of ElliottWaveTrader.net (www.elliottwavetrader.net), a live Trading Room featuring his intraday market analysis (including emini S&P 500, metals, oil, USD & VXX), interactive member-analyst forum, and detailed library of Elliott Wave education.

© 2017 Copyright Avi Gilburt - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in