Author Archives: ElliottWaveTrader

The Stock Market Is Not Even Close To A Major Top

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by Avi Gilburt, ElliottWaveTrader.net

The stock market is too high.  The fundamentals don’t support these heights.  This rally is completely “fake” because it has been “manipulated.” The market is in “nosebleed” territory.  We are in a blow-off rally. The market is about to crash.  Yes, we have heard it all for months now.  Maybe even for years.  And, such perspectives have caused many to miss one of the best rallies we have seen in years, as they expect the market to top “any day now.”

But, the simple truth is that the market is in the heart of what us Elliotticians call a “3rd wave”, and they are relentless and the most powerful segment of a 5-wave Elliott structure.   In fact, we have been within the heart of a 3rd wave since early November when we went against the common “market-think” and called for a strong rally to 2300 and beyond on the S&P 500 (SPX), even though Trump won the election.  But, it also means that we still have to complete waves 3, 4 and 5 before a long-term top is seen, as I have been noting since early 2016, which you can see in a chart of our market calls in the link below.

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Are You Still Waiting for a Metals Pullback?

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As the majority of the metals market seems to be awaiting a “pullback,” the metals market, like the equity market, has been quite stingy.  But, as I noted in my mid-week update, “by no means am I going to say that I “expect” more of a pullback to be seen, as the minimal number of waves are in place right now to support a break out in the complex within the next few trading days.”  I am still of the same perspective.

On Friday, I did an interview for a financial show, and prior to that interview, the interviewer me told me that most of their guests, who are normally bullish the metals complex, do not think that the metals are going to be breaking out anytime soon.  In fact, he was quite surprised when I explained to him that I see a set-up which can ignite a strong rally in the metals complex at any time now.

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Very Bullish Set Up In The Metals Complex

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First published Sat Jan 28 for members of ElliottWaveTrader.net:  In mid-November, as most of the market was becoming quite bearish in the metals complex once again, I provided you with a path as to how the market can get even more bearish, and set us up for a bear trap, while I was noting that I was reducing my hedges:

In our Trading Room at Elliottwavetrader.net and in my live video sessions with our members, I have noted several times over the past weeks that the perfect bottoming set up would begin as the market recognizes a heads and shoulders pattern setting up in the GDX.  And, many this past week were pointing to this “perfect” pattern, which they view as setting us up for new lows in the complex.  In fact, it could be “too perfect” since the entire market seems to now be hyper-focused on how it is going to take us to lower lows.

But, my view was that this pattern could very well present the market with a head fake.  I was viewing a break of the neckline as providing more confidence to the shorts in the market, as they would likely then press their shorts.  However, I think there is a very strong potential for them to be seeing those shorts squeezed . . .  Those shorts can certainly provide us with the fuel to begin our 3rd wave higher.  While there is clearly no certainty in this potential, I have seen this happen so many times, especially when the heads and shoulders patterns looks “too good,” as this one does.

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Gold & Silver: How Much Of A Pullback?

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As I noted last weekend, silver has finally joined the party, and has completed quite a full 5 waves up off the lows, and potentially even more.  And, as stated last weekend, since everyone was looking for a pullback coming into this past week, the market did just the opposite and continued higher early in the week.  So, can we see more of a pullback in the coming week?

Well, I will say that a further pullback in silver would provide us with a really nice inverted heads and shoulders in the silver chart.  But, again, that just may be too easy.  You see, when the greater market sees the potential for any type of heads and shoulders patterns, especially bearish ones, they rarely play out as most expect.  Most of the time, they simply set up the bears on what seems to be an initial trigger of the pattern by a break of the neckline, only to see a strong reversal catching all the shorts by surprise as the heads and shoulders invalidates and turns the market up strongly.  This is what I warned about months ago in the GDX, and exactly what happened in the complex over the last month.

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Could The Miners Have Provided The Ultimate Fake Out?

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by Avi Gilburt, ElliottWaveTrader.net

First published Sat Jan 7 for members of ElliottWaveTrader.net:  This past week saw a very nice move higher in the GDX and gold, but silver has seriously lagged, which does dampen any outright bullishness at this time.  But, let’s review where we stand overall.

Several weeks ago, as the GDX broke down below its .618 retracement, many were throwing in the bullish towel, and everyone seemed to adopt the “clear” heads and shoulders pattern presenting on the daily chart, while pointing to target levels below the January 2016 low.  But, it just seemed too obvious to me, and it seemed like the market was setting everyone up.

In November, well before we broke the .618 retracement and well before we broke the neckline of the seeming heads and shoulders pattern, I wrote the following:

In our Trading Room at Elliottwavetrader.net and in my live video sessions with our members, I have noted several times over the past weeks that the perfect bottoming set up would begin as the market recognizes a heads and shoulders pattern setting up in the GDX.  And, many this past week were pointing to this “perfect” pattern, which they view as setting us up for new lows in the complex.  In fact, it could be “too perfect” since the entire market seems to now be hyper-focused on how it is going to take us to lower lows.

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Are We Out of the Woods Yet?

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First published Sun Jan 1 for members of ElliottWaveTrader.net:  Last weekend (Christmas weekend), I noted that set ups such as we have been seeing in the GDX usually lead to strong rallies which can see a 10% move higher quite quickly.  Since then, the GDX ran 19% from its recent lows, with Thursday (Dec 29) alone seeing a 7.5% rise. Yes, these divergent set ups can provide for powerful reversal reactions.  But, it does not mean we are out of the woods just yet.

In fact, silver still is quite weak, and gold has not yet convinced me either.  Moreover, one does not have to make this very complicated at this point in time when one views the daily chart on the GDX.  As many of you, as well as the rest of the market, have been seeing the downtrend channel we have developed in the GDX, we cannot gain escape velocity until we are able to clear that 22.50 region.

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Is It Time to Give Up?

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Is It Time To Give Up? by Avi Gilburt, ElliottWaveTrader.net

First published Sat Dec 17 for members of ElliottWaveTrader.net:  When dealing with markets, one must avoid, as much as possible, emotional responses and simply focus on the facts before us.  Last weekend, I presented my “factual” analysis of the market, and explained why I have retained a larger degree bullish perspective.  I suggest you review what I wrote so you can understand how I weigh the pros and cons in the complex, and why I have come to the conclusion I maintain.  Moreover, within the analysis I have been providing for the last month, I have been suggesting that another drop will likely be seen in the GDX and silver, and this past week that has finally been seen.

With the drop this past week in silver and GDX to lower levels below the November lows, the market has just about completed the pattern I have been tracking to end this correction which began in August. As I noted during my mid-week update, the initial rally off the Jan/Dec lows took 8 months, and the correction has now taken half that time.  This is quite normal for timing on corrections, so there is nothing unusual about the timing aspect of the correction.

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