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
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24
Micro Strategy Bubble Mania - 10th May 24
Biden's Bureau of Labor Statistics is Cooking Jobs Reports - 10th May 24
Bitcoin Price Swings Analysis - 9th May 24
Could Chinese Gold Be the Straw That Breaks the Dollar's Back? - 9th May 24
The Federal Reserve Is Broke! - 9th May 24
The Elliott Wave Crash Course - 9th May 24
Psychologically Prepared for Bitcoin Bull Market Bubble MANIA Rug Pull Corrections 2024 - 8th May 24
Why You Should Pay Attention to This Time-Tested Stock Market Indicator Now - 8th May 24
Copper: The India Factor - 8th May 24
Gold 2008 and 2022 All Over Again? Stocks, USDX - 8th May 24
Holocaust Survivor States Israel is Like Nazi Germany, The Fourth Reich - 8th May 24
Fourth Reich Invades Rafah Concentration Camp To Kill Palestinian Children - 8th May 24
THE GLOBAL WARMING CLIMATE CHANGE MEGA-TREND IS THE INFLATION MEGA-TREND! - 3rd May 24
Banxe Reviews: Revolutionising Financial Transactions with Innovative Solutions - 3rd May 24
MRNA - The beginning of the end of cancer? - 3rd May 24
The Future of Gaming: What's Coming Next? - 3rd May 24
What is A Split Capital Investment Trust? - 3rd May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Are You Getting Ready For The Next Stock Market Crash?

Stock-Markets / Stock Market Crash Nov 17, 2020 - 05:11 PM GMT

By: Avi_Gilburt

Stock-Markets

First published on Seeking Alpha pre-open on Monday November 16: I have read one article after another calling this market delusional, wrong, crazy, impossible, dangerous, a bubble, etc. And what is common amongst all these articles is that none of the authors expected the market to rise this high. Moreover, they all point to Covid as the primary reason for their bearishness. So, when they don’t understand what is going on, they resort to name calling.

But, calling the market names will not help your investment accounts. Moreover, has basing your market perspective on Covid helped your investment account? Rather, it behooves you to seek out a better way to understand the market.


I know many of you are now getting ready for the next crash, which many seem to be expecting due to all the Covid news. But, let me ask you a question: Did the worst news about the death rates and national economic lockdown stop the market from rallying 64% and 1400 SPX points from the bottom in March? Yet, you are now assuming it will this time!? Is this time different?

Well, maybe you are right. But, I am not seeing the same downside set up we had in February, so I certainly question the “common-think” I keep reading about regarding the market being about to crash.

In fact, I actually think the market is setting up to rally to the 4000-4100SPX region over the coming months. The only question with which I am struggling is how deep of a pullback will we see in the coming week or two before that rally begins in earnest.

You see, based upon our understanding of Elliott Wave, after the market completed a 5-wave rally off the March low, we normally see a retracement of .382-.618 of the prior rally. Thus far, the market has only provided a .236 retracement, which is normally quite shallow and unusual.

Yet, many stocks within the market have provided us with their standard .382-.618 retracement during September and October, which is why I have been focusing the members of The Market Pinball Wizard on buying those stocks during those months.

But, the question still remains as to whether there is one more drop in the SPX to take us to that target region or if the shallow retracement is all we are going to see before we head to our next target in the 4000-4100SPX region.

So, while most of you will continue to focus on the Covid news, I am focusing on the 3335-3400SPX region. As long as any further weakness in the coming week or two holds that support, then we will set up to rally to 4000-4100SPX next. However, if we see a sustained and impulsive break of the 3335SPX level, then it opens the door to a more standard pullback to the 3050SPX region before we head to 4000-4100 after Thanksgiving.

Those of you that recognize that the Covid news has simply been a distraction which kept many investors out of the market (with some even shorting) during one of the strongest rallies in market history will prepare yourselves appropriately for the next rally to 4000-4100SPX. However, those of you that are simply not burdened by the facts of what occurred in the market from March through September will continue to bury your heads in the sand and believe that the Covid news is driving the market, while you prepare for the market to crash. Good luck to all.

Avi Gilburt is a widely followed Elliott Wave analyst and founder of ElliottWaveTrader.net, a live trading room featuring his analysis on the S&P 500, precious metals, oil & USD, plus a team of analysts covering a range of other markets. He recently founded FATRADER.com, a live forum featuring some of the top fundamental analysts online today to showcase research and elevate discussion for traders & investors interested in fundamental rather than technical analysis.

© 2020 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