Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Buying a Custom Built Gaming PC From Overclockers.co.uk - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20
The Growing Weaponization of Space - 14th Feb 20
Will the 2020s Be Good or Bad for the Gold Market? - 14th Feb 20
Predictive Modeling Suggests Gold Price Will Break Above $1650 Within 15~30 Days - 14th Feb 20
UK Coronavirus COVID-19 Infections and Deaths Trend Forecast 2020 - 14th Feb 20
Coronavirus, Powell and Gold - 14th Feb 20
How the Corona Virus is Affecting Global Stock Markets - 14th Feb 20
British Pound GBP Trend and Elliott Wave Analysis - 13th Feb 20
Owning and Driving a Land Rover Discovery Sport in 2020 - 2 YEAR Review - 13th Feb 20
Shipping Rates Plunge, Commodities and Stocks May Follow - 13th Feb 20
Powell says Fed will aggressively use QE to fight next recession - 13th Feb 20
PALLADIUM - THIS Is What a Run on the Bank for Precious Metals Looks Like… - 13th Feb 20
Bitcoin: "Is it too late to get in?" Get Answers Now - 13th Feb 20
China Coronavirus Infections Soar by 1/3rd to 60,000, Deaths Jump to 1,367 - 13th Feb 20
Crude Oil Price Action – Like a Coiled Spring Already? - 13th Feb 20
China Under Reporting Coronavirus COVID-19 Infections, Africa and South America Hidden Outbreaks - 12th Feb 20
Will USD X Decline About to Trigger Precious Metals Rally - 12th Feb 20
Copper Market is a Coiled Spring - 12th Feb 20
Dow Theory Stock Market Warning from the Utilities Index - 12th Feb 20
How to Get Virgin Media Engineers to FIX Hub 3.0 Problems and NOT BS Customers - 12th Feb 20
China Under Reporting Coronavirus COVID-19 Infections by 66% Due to Capacity Constraints - 12th Feb 20
Is Coronavirus the Black Swan That Takes Gold To-Da-Moon? - 12th Feb 20
Stock Market 2020 – A Close Look At What To Expect - 12th Feb 20
IBM AI Mega-trend Tech Stocks Investing 2020 - 11th Feb 20
The US Dollar’s Subtle Message for Gold - 11th Feb 20
What All To Do Before Opening A Bank Account For Your Business - 11th Feb 20
How and When to Enter Day Trades & Swing Trade For Maximum Gains - 11th Feb 20
The Great Stock Market Dichotomy - 11th Feb 20
Stock Market Sector Rotation Should Peak Within 60+ Days – Part II - 11th Feb 20
CoronaVirus Pandemic Stocks Bear Market Risk 2020? - Video - 11th Feb 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Is It 2016 Again For U.S. Equities, Emerging Markets And Gold?

Stock-Markets / Financial Markets 2018 Jun 11, 2018 - 05:42 AM GMT

By: Avi_Gilburt

Stock-Markets

Bears seem to be roaming wherever you look, whether it be in the US equity market, the gold market, and especially in the emerging markets as of recently. Whether I read articles, or the comments to those articles, it seems there is a common expectation that “emerging market dominoes are falling” and it will “cause deleveraging and contagion” across portfolios worldwide.

It certainly sounds like a dire situation is developing in the world today. Does it not?


Now, where have I heard this story before? Oh, yes. Back in early 2016, the common belief was the same as it seems to be now.

Yet, as we began 2016, I noted the following in my weekend update to subscribers of my analysis:

“Lastly, as I have been mentioning several times, I see the potential for 2016 being the year that major commodities, many emerging markets, and the U.S. equity market all bottom, and we begin a global melt up. So, stay tuned, as 2016-2018 will likely be a very interesting time.”

So, why was most of the market so bearish in early 2016, whereas I saw something so extremely different?

Most market participants and analysts alike see price heading in a specific direction and assume that it will continue in that direction indefinitely. While often there are times they would be correct for maintaining such an expectation, such as the stock market rally from 2016-2018, which we foresaw before it occurred, many of these prognostications do not have the benefit of understanding the larger perspective of where markets reside within their respective cycles. Understanding how markets progress and regress in the larger scale of their respective cycles can assist the average investor in maintaining on the correct side of the market the great majority of the time.

When our analysis of market sentiment (based upon Elliott Wave structures) couple with supporting technical readings, it usually provides us with a high probability perspective. And, that perspective aligns currently in the emerging markets, US equities and gold in the same way it did back in early 2016.

Admittedly, I do not see the same upside potential gains in the US Equity market and emerging markets as I did back in 2016, I still see the same bottoming set up as we experienced in early 2016. While we saw the potential for a multi-year rally beginning in early 2016 for equity and emerging markets, I think this rally will only present us with 6-12 months of rally potential.

For this reason, I see an opportunity in the iShares MSCI Emerging Markets ETF (EEM), which seeks to track the investment results of the MSCI Emerging Markets Index. I think this fund presents us with a good vehicle to take advantage of the opportunity I am expecting in the emerging markets.

When it comes to the EEM, as long as the market holds over the 43 region, I am looking for a minimum upside target of 55, with a more ideal target at 60. In other words, as long as 43 holds as support, the sentiment pattern is pointing much higher rather than pointing to the implosion that many seem to be quite certain is taking hold. So, I would simply recognize the extreme negative sentiment as pointing to a bottoming in the complex.

Yet, since we can never know, with certainty, what the market will do, as we only base our analysis upon probabilities, we use these support levels within our risk management plans, and I suggest you do the same.

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.


© 2005-2019 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

6 Critical Money Making Rules