Author Archives: ElliottWaveTrader

The Metals Market Is A Mess

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When I sat down to review how I can update the analysis I provided to our members in my mid-week update, I realized that there is not much more technical analysis I am able to add to what I wrote to our membership in my mid-week analysis, so I am going to repeat it here, with some additional general thoughts below:

While I strive to provide deep insight into the markets I track for you, I am somewhat at a loss in this region with the metals, especially with the various charts presenting quite differently.  

For those that have followed me for years, you know when I am bullish and you know when I am bearish.  And, for the great majority of the time, my bullishness and bearishness have been appropriate to prepare for impending price action.  However, we are now in a region of uncertainty, and I don’t think I can classify it any better than that at this point in time. (more…)

Anyone Else Want To Call For A Market Crash?

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Hindenburg omens. Market valuations. Record low volatility. And, I am only scratching the surface of all the reasons paraded before investors as to why this market is, in their opinion, “too high.”

So, is this time different? Have we finally conquered the business cycle and the stock market will rally on forever?

Absolutely not.

But, when article writers suggest that their old methods of market evaluation have failed them, and then conclude that we need to prepare for a market crash, it makes me question the logical if/then perspective of their analysis. (more…)

Nothing Can Bring Down This Market Except . . .

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This past week, we experienced yet another horrendous terrorist attack in New York City. And, amazingly, just like what occurred after several other terrorist attacks that have been experienced over the last year, the market rallied right after the attack.

It has almost gotten to the point that people now expect the stock market to rally after a terrorist attack. Have we really become this warped in our thinking? Must we hold fast to ridiculous notions that news is what drives the stock market to the point that we have to resign ourselves to believing that the market will rally “because” of a terrorist attack? Do you not see how ridiculous these perspectives really are?

Yet, if the market dropped after a terrorist attack, there is no question in my mind that every analyst and their mother would be absolutely certain that the market dropped specifically due to the terrorist attack. Every article the next day would have been pointing to the attack being the definitive “cause” of the market drop. And, if I then challenged this false exogenous causation theory, the response I would receive is “don’t you believe your eyes?” Yet, not a single analyst dares to suggest that the markets are rallying because of news of terrorist attacks despite seeing many instances of this occurring over the last two years. Do, they not believe their eyes? (more…)

2017 Was The Year Of Gold’s Consolidation, So What Will 2018 Present?

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One of the most frustrating charts to trade during 2017 has been almost any chart in the metals complex. In fact, if you speak to most metals investors, you would almost think that they have incurred a huge loss in 2017.

But, that is far from the truth. In fact, since we caught the low around 107 in the GLD at the end of 2016, we have seen it rally almost 20% off those lows when it struck its 2017 high back in early September. As I write this article, we are still 13% off those lows.

Even though we still have seen a nicely positive year for GLD to date, the sentiment is one of despondency and despair. You see, the complex has had multiple opportunities to strongly break out during 2017, but has failed to reach escape velocity despite several set ups to do so. And this has likely caused the negative sentiment pervasive through the market, despite the positive return year. In fact, the best categorization of the sentiment I am seeing in the market is indifference. (more…)

Miners Could Be Setting Up For A Big Hit Into Year End

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As I read through the blogs and public articles on miners and the GDX, it has become quite evident that many have now turned either bearish or completely indifferent to this complex. In fact, it seems as though the number of hits being seen in the Seeking Alpha metals section has dropped dramatically over the last year.

It seems most are looking for the metals to just drop from right here for a myriad of reasons. (Well, that is, other than those who only see the word “UP” when you mention the word “gold” to them). For those who usually place their expectation upon the immediate direction of the complex, it would seem that the recent drop in price has them expecting it will immediately continue to drop. Isn’t linear analysis wonderful? So, it would make sense, at least from a sentiment standpoint, that we need to get a number of them believing that the market is about to rally strongly, which will then trigger our trap door. (more…)

Bearishness Still Sells, But The Market Does Not

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I recently read a missive by John Mauldin wherein he makes an observation of what he is seeing from similar types of “analysis” of the stock market today:

“. . . a quick search of the usual suspects on the internet reveals a metric boatload of market analysts complaining about sky-high valuations, 8.5 years of bull market momentum, passive investing, over-concentration in cash-flow producing assets and the impending doom of a correction so massive it will clean our colons as well as our bank accounts.”

For those of you who read Seeking Alpha regularly, what percentage of the articles about the general equity markets have you read that have pointed to us being in a strong bull market and continuing much higher over the last 2 years? Based upon the ranking of the market analysts on this site, it would certainly suggest that most of the articles have leaned bearish, and, yes, I am being kind with that categorization. I mean, are these articles really necessary to explain to me that there are risks inherent in the financial markets? And, here I thought making money was easy. (more…)

The S&P 500 Is Headed Over 3000

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Note from Tim: In case it isn’t screamingly obvious, I did not write this post.

Many will simply read the headline to this article, and use it as support for their belief in the market striking a multi-year top right now. I mean, aren’t headlines like this proof that the market is overheated?

Well, the answer is a definite “sometimes.” You see, back in 2015 and 2016 I was writing articles with headlines saying that we are going to target the 2500SPX region. And, if you thought that those headlines were portending the end of the bull market, then you were clearly wrong. So, consider, maybe this headline is prescient rather than a contrarian signal.

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