Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Are The Stock Market Bears About To Fumble?

Stock-Markets / Stock Markets 2018 Mar 12, 2018 - 04:40 AM GMT

By: Avi_Gilburt

Stock-Markets

Do you think we will ever see a week of market moves associated with news events for which you will not shake your head?

Week after week I think analysts say something so stupid that I just want to scream. As I have pointed out so many times over the years, I keep hoping that some form of sanity will grip pundits one day. I keep hoping that they may wake up and recognize the error of their ways. But, alas, I continue to long for that day.


So, whenever the market moves, everyone goes through the exact same thinking process: “Hey, look. The market just saw a big move. Let’s go see what news caused this move.”

Is this not the structure of almost all the analysis you see presented? Let’s look at this past week, for example. During the week, the futures took a strong downturn. And within hours, every analyst was certain that it was “caused” by Gary Cohn’s resignation.

So, let’s think about this. For how long has this resignation been telegraphed? I think we all knew it was coming. So, are you going to tell me that the market did not already have this “priced in?” You see, this is where this type of analysis gets really fuzzy.

When some form of “surprise” news comes out, and the market moves in the opposite direction than most expect, pundits are quick to note that the bad news “was already priced into the market,” which is why the market seemingly ignored it. But, when a news event hits the wires after it was widely telegraphed beforehand, yet the market sees a sizable move, you mean to tell me that news known before the announcement was not priced in?

When you begin thinking in an intellectually honest manner about the market, you begin to see how ridiculous most “analysis” presented about why the market moves really are. In fact, do you even realize they are trying to explain a move in hindsight, yet are often stumped for a reasonable reason for the move? Yet, this still remains the pervasive manner in which the public and analysts view the market.

When the market bottomed in early February, we set our sights on a rally to take us back to at least the 2727SPX region. And, I did not need to provide you with any "reason" as to why this will occur. Yet, it still happened, and I still have no need to go back to explain "why" it happened. I just accept that there is a power much stronger in this market than the "news." It is a power which guides the market in its general movements, and often provides advanced notice of these movements, assuming you know where to look.

Once we got to the 2727 region, I noted that the easy part of this move up has likely been done, and it will get much more difficult from that time on. My preference was to see a more protracted wave (4) take us back down to the lows struck in February, and potentially even a bit lower.

For those that read my analysis carefully, you would understand that I was quite skeptical that a one and a half year 3rd wave would be corrected by a week and a half long 4th wave pullback. That is not typical of what we normally see, despite the size of the drop. So, while the drop did hit the top of our target region for wave (4) within 3 points, I expected a more protracted correction from a timing perspective.

For this reason, I stood aside from the market action once we struck 2727, as I wanted to see how the market would resolve within this region.

Last weekend, I noted that I think we can see a rally during the coming week. However, the upper target I presented to my members at ElliottWaveTrader.net was the 2765-2770SPX region, and Friday took us a bit above that resistance.

In fact, the market closed on the next resistance level I noted to my members at 2787SPX right on the money. And, the action early next week can provide us a strong clue as to whether our correction has completed.

If the market moves strongly through 2787SPX, that is an indication that the probabilities are rising that the low for wave (4) are potentially in place. And, as long as the market is unable to see a sustained break below 2754SPX on all pullbacks from this point forth, it opens the door for us to continue this rally to 3000+ in 2018. And, should the market continue to rally, we will continue to raise our support levels for use as stops for long positions.

However, a sustained break of the 2754SPX region keeps the bears in control, and still points us towards at least the 2600 region, and potentially as low as the 2440SPX region, depending upon the structure as it develops.

As you can see, the coming week will likely provide us with a point of inflection. And, as the bears were moving into scoring position again, they may be fumbling the ball on the bulls 15-yard line.

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.

© 2018 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.


© 2005-2022 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