Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The AI Stocks Megatrend Big Picture - 8th Mar 21
The Future of FINRA, Regulatory Defense and Bad Stockbrokers - 8th Mar 21
Almost Everyone Is Online: But Most of the Money Isn’t - 8th Mar 21
It is Time for Stock Market Investor Caution? - 8th Mar 21
Gold Predictive Modeling Suggests A New Rally Targeting $2300+, But When Will it Start? - 8th Mar 21
Gold: Crisis or Opportunity? - 8th Mar 21
US Bitter Cold Snap is a sign of the times - 8th Mar 21
How Scan Computers Builds Your Custom Built PC - Scan.co.uk Review (2) - 8th Mar 21
US Economy, GDP, Unemployment, Inflation Impact on House Prices Trend 2021 - 8th Mar 21
BACK TO SCHOOL - UK Coronavirus Lockdown Ending - Summer Holidays & Booming Economy Ahead - 8th Mar 21
So, Where Is Gold's Corrective Upswing? - 7th Mar 21
US Treasury Yields Rally May Trigger Stock Market Crazy Ivan Event - 7th Mar 21
The Great Reset Is Coming for the Currency - 7th Mar 21
Gold Continues Declines on Bond Yield Jitters - 7th Mar 21
The Case for Inflation - 7th Mar 21
Dow Short-term Stock Market Trend Analysis - 6th Mar 21
Intel Rocket Lake EXPLODE on Launch - 11th Gen CPU's RUN VERY HOT Bad Cinebench R20 Scores - 6th Mar 21
US & UK Head for Post Coronavirus Pandemic Lockdown Inflationary Economic BOOM - 6th Mar 21
FED Balance Sheet Current State - 5th Mar 21
The Global Vaccine Race Against Time and Variants - 5th Mar 21
US Treasury Yields Rally May Trigger A Crazy Ivan Event (Again) In Stock Market - 5th Mar 21
After Gold’s Slide, What Happens to Miners? - 5th Mar 21
Racism Pandemic Why UK Black and Asians NOT Getting Vaccinated - NHS Covid-19 BAME - 5th Mar 21
Get Ready for Inflation Mega-trend to Surge 2021 - 4th Mar 21
Stocks, Gold – Rebound or Dead Cat Bounce? - 4th Mar 21
The Top Technologies That Are Transforming the Casino Industry - 4th Mar 21
How to Get RICH Crypto Mining Bitcoin, Ethereum With NiceHash - 4th Mar 21
Coronavirus Pandemic Vaccines Indicator Current State - 3rd Mar 21
AI Tech Stocks Investing 2021 Buy Ratings, Levels and Valuations Explained - 3rd Mar 21
Stock Market Bull Trend in Jeopardy - 3rd Mar 21
New Global Reserve Currency? - 3rd Mar 21
Gold To Monetary Base Ratio Says No Hyperinflation - 3rd Mar 21
US Fed Grilled about Its Unsound Currency, Digital Currency Schemes - 3rd Mar 21
The Case Against Inflation - 3rd Mar 21
How to Start Crypto Mining Bitcoins, Ethereum with Your Desktop PC, Laptop with NiceHash - 3rd Mar 21
AI Tech Stocks Investing Portfolio Buying Levels and Valuations 2021 Explained - 2nd Mar 21
There’s A “Chip” Shortage: And TSMC Holds All The Cards - 2nd Mar 21
Why now might be a good time to buy gold and gold juniors - 2nd Mar 21
Silver Is Close To Something Big - 2nd Mar 21
Bitcoin: Let's Put 2 Heart-Pounding Price Drops into Perspective - 2nd Mar 21
Gold Stocks Spring Rally 2021 - 2nd Mar 21
US Housing Market Trend Forecast 2021 - 2nd Mar 21
Covid-19 Vaccinations US House Prices Trend Indicator 2021 - 2nd Mar 21
How blockchain technology will change the online casino - 2nd Mar 21
How Much PC RAM Memory is Good in 2021, 16gb, 32gb or 64gb? - 2nd Mar 21
US Housing Market House Prices Momentum Analysis - 26th Feb 21
FOMC Minutes Disappoint Gold Bulls - 26th Feb 21
Kiss of Life for Gold - 26th Feb 21
Congress May Increase The Moral Hazard Building In The Stock Market - 26th Feb 21
The “Oil Of The Future” Is Set To Soar In 2021 - 26th Feb 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Stock Market March Melt-Up Madness

Stock-Markets / Stock Market 2021 Feb 19, 2021 - 06:10 PM GMT

By: Avi_Gilburt

Stock-Markets

March Madness is a term referring to the college basketball single-elimination tournament of 68 teams, leading up to the “Final Four,” from which the ultimate college basketball champion is determined. Most of the games take place during the last half of March, with the ultimate winner determined in early April.

But, I am seeing potential for a March Madness setup in the equity market as well.

While analyst and investor alike have been scratching their heads at the amazing market rally, we have seen since we struck the low back in March, I think many will be surprised at the next phase of the rally, which may actually be one of the strongest.


I know all the reasons that the market is not supposed to rally, but since when is the market a reasonable environment? You see, the stock market is driven mostly by emotion, and trying to reason within an emotional environment is like trying to reason with your spouse when they are emotional. How well does that work for you?

Back in March of 2020, while we were approaching the lows near 2200SPX, most were viewing this as the initiation of a larger bear market. Yet, I reiterated to all those willing to listen that I think we are about to begin an epic rally which will take us to 4000+, and potentially point us to the 6000 region in the coming years:

“Our long-term targets are still 4000+ in the SPX. And, thus far, I have not seen anything to dispel us of this notion. From our perspective, this was the 4th wave decline I had actually expected to see last year. But, it certainly took its sweet time to show up. Yet, that does not change the fact that it is likely a 4th wave. And, since Elliott’s structures are 5-wave structures, it still leaves me expecting a 5th wave in the coming years which should take us at least to 4000, with potential to move as high as 6000.” March 15, 2020

“The evidence leads me to conclude that we need a 5th wave to 4000+ in the coming years before the bull market off the 2009 low completes.” March 21, 2020

And, as the weeks progressed, the market made it clear that we were starting that major 5th wave to 4000+. Yet, the one thing that the market did which made it more difficult on my analysis is the lack of standard pullbacks along the way. In fact, not a single pullback since the March low exceeded a .382 Fibonacci retracement throughout this rally, and that applies to the larger and smaller degree sub-structures. In fact, many retracements did not even exceed the .236 Fibonacci retracement.

Most market participants remained way too bearish all the way up, which did not allow us for much of a pullback throughout all segments of this rally off the March 2020 lows. In fact, most market participants were looking for the next major drop/crash as we continued to rally over 1500 points off the March 2020 low, with many shorting for a good portion of that rally. That is likely what prevented us from seeing standard pullbacks along the way.

And this is why I always say that understanding market context is one of the most important and powerful pieces of information for an investor. If you mistakenly believed that the March 2020 drop was the start of a bear market rather than the culmination of one, then you lost one of the best buying opportunities we have seen in many years. However, our view of market context told us clearly that the March 2020 decline was the culmination of a larger degree correction that had been going on for some time underneath the hood of the market, and when completed, would launch us into our next bullish phase.

Now, I am going to provide a bit of market context so that you hopefully will not make the same mistake again. You see, the 3rd wave is often the strongest segment of the Elliott Wave 5-wave structure. And, currently, the market is building that potential for the heart of a 3rd wave advance within this final 5th wave advance off the 2009 lows. This segment of the rally phase of the March 2020 lows is pointing us first to the 4300SPX region in the spring, with the potential for the 4600SPX region by the summer.

But, before you begin to leverage up to the hilt on the long side, I must warn you that I am going to be watching the market very carefully over the coming 2-3 weeks to provide me with the setup which will trigger that rally. Should that setup develop and trigger in the next 2-3 weeks, then we will likely see a very strong March for the equity market.

Currently, our next resistance is in the 4050/60SPX region. And, as long as the market is contained below that resistance over the next week or so, I am expecting another bout of weakness before we are ready to head to 4300 in earnest.

I won’t bore you with how we use our Fibonacci Pinball methodology to identify these higher probability confluence points within the market. But, if you are interested in learning, you can review the 6-part series I wrote on the basics of how we approach our analysis.

Currently, our major support is in the 3800/3850SPX region. And, as long as we continue to respect that support as we build our setup in the coming two weeks, then I will be expecting a strong rally throughout March. But, again, I reiterate that I am looking for a specific setup to develop in the coming two weeks before I turn aggressively bullish for the month of March.

For if we see a break down below 3800SPX during this time, then it means that our 2nd wave pullback can again re-test the 3600 region before we begin that 3rd wave rally phase to 4300, and the rally to 4300SPX is simply postponed a bit. So, watch for the market clues during the next two weeks, as I think there is a very good chance that we could set up for that rally to 4300 sooner rather than later.

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.

© 2021 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