Category Archives: Bulls/Bears

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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Stocks and Gold: the Next Opportunity

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Unless you visit the Notes From the Rabbit Hole website regularly, you might think the title of this article implies it is written by a market analyst pretending to know what will happen; like a top in the stock market or a resumed bull cycle in gold.  You might also think it is written by one of the writers who’ve either a) been fighting the stock bull since the bearish market terminated a year ago or b) been a perma gold bug bull.

So once again, we have our disclaimers because in a milieu of quickly forgotten soundbites, integrity is important.  So I point you to a couple of posts (among many others) that indicated, when the time was right for people to get bullish the stock market in favor of gold.

AMAT Chirps, B2B Ramps, Yellen Hawks and Gold’s Fundamentals Erode (May 30, 2016) (more…)

A Pearl Cast Before A Swine

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I’ve blocked my latest twitter troll, though apart from the one with very poor english a few weeks ago, I strongly suspect that I’ve had the same troll on twitter and my blog for a few months now. If I’m right then he has a London IP address and seems to have a lot of time on his hands. Some of you may have been wondering about the posted trade I mentioned to him, as it’s rare for me to post these, but I was a bit irritated at the 2015 high with being called a permabear for calling a high there, and with clueless pundits telling me that big retracements wouldn’t be allowed by the Fed, so on Tuesday 26th May 2015

I wrote a post helpfully entitled ‘On The Road to 1820‘, with SPX at 2126 at the time, and mentioned that I was short from 2132 ES and was planning to hold it for a 300 handle decline. I cashed that short at 1812 on the morning of Wednesday 20th January 2016 and reviewed it at the end of my post that day called ‘The Trend Is Strong In This One‘. It was a sweet trade (and call of course) and I considered that my point had been made. Needless to say my troll wasn’t impressed, but then it’s not possible to impress a troll. On to the markets.

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Likely Capitulation High Yesterday

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The short term rising wedge on SPX either overthrew yesterday or widened into a small rising channel, but the big news on the hourly chart was that the high established a perfect overall rising channel for this move from early December. The AM high today was a slight break below short term rising channel support and on a conviction break below the next obvious target would be larger rising channel support, currently in the 2285 area. I do like a retest and marginal new high from here, that would set up possible 60min sell signals and get SPX a little closer to my 100% fib extension target at 2356/7. It would also give AMZN and TSLA a chance to do the ATH retests that may be required for a swing high here on NDX/NQ. SPX 60min chart:

170216 SPX 60min

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Highs Can Take A While

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Another new all time high this morning and SPX is still on a daily upper band ride. That could end at any time but we’re going to need to see some evidence before having any confidence in a turn here. This move up from the last low is in a decent little rising wedge and obviously that rising wedge support needs to break, but the key level that needs to break is yesterday’s low at 2322.17. A break below would be a significant sign of weakness and the short term high (at least) would likely then be in. There is a lot of negative divergence on the hourly chart and the rising wedge on price and rising channel on the RSI 14 are firmly leaning bearish. SPX 60min chart:

170215 SPX 60min

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