Category Archives: E-Wave

The Stock Market Just Broke

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The market made a new all-time high this past week. However, the manner in which it pulled back from that all-time high on Friday has caused me to slightly modify my expectations.

I have now seen about a dozen articles over the last week, mostly presented as head-scratching ramblings, discussing the breakdown of so many “correlations.” One of the recent articles noted:

“Under normal circumstances, you could wake up on any given day, take one look at the yen, and make a pretty solid prediction about how Treasurys traded overnight and/or how the Nikkei held up. And vice versa. Lately, that relationship has broken down almost entirely.”

And, in early 2017, even Morgan Stanley had taken notice:

“Regional correlations, cross-asset correlations and individual stock and FX correlations have fallen simultaneously. That’s unusual; we haven’t seen a shift this severe in over a decade . . .”

Yet, despite pointing out how the market does not make sense, some of the same authors attempt to use the paradigms that broke down in order to explain that which they say does not make sense. Yes, you heard me right. They recognize that their analysis methodology has failed to keep them on the correct side of the market, yet attempt to explain that failure using the same methods which they noted have failed them.

One attempted to “explain” why correlations have broken down through a, as he put it, “truly torturous, yet completely plausible, explanation for what we’re seeing in equities and rates.”

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Is This a Big FAKEOUT?

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By Avi Gilburt, ElliottWaveTrader.net

One of the benefits of being a part of a trading room with over 3000 members, over 400 professionals, and 15 analysts is that we all are able to take advantage of the combined wisdom of all the members and analysts in the room.  Since I am but one person within this room, I am clearly unable to see all potentials the market may be throwing at us.  And, thanks to the collective wisdom of the room, several people have provided me with insights today which I did not have on my own.   So, there is no question that we all can benefit from the collective wisdom of the room, and for that I am grateful to you all.

First, our analyst Garrett Patten private messaged me today to tell me that he is having a hard time seeing enough stocks setting up to support a rally to 2500SPX at this time.  Rather, many of them still need more pullback before they can substantiate such a run.  And, since this is a market of stocks, I clearly need to take that into account in my own analysis. (more…)

Nothing Can Stop This Market – Except?

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The SPX has continued its rally towards the ideal 2410SPX region this past week that we presented to you a month ago. And, it seems we still have a few squiggles to the upside left before this pattern is completed, and then tested.

Those with a short bias in this market have not fared very well. At each and every twist and turn, the market has proved its bullish intent, and continues to confirm our expectations that our long-term target of 2537-2611SPX will be met, if not even possibly exceed by next year.

In fact, I have warned for quite some time that we will begin to see former bears turning quite bullish, and we have seen this occur over the last several months. While I still do not believe we have reached the euphoric levels needed to mark a significant top, many former bears are coming over to the dark side.

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Is It A Bull Market Or Bear Market In Metals?

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Is It A Bull Market Or Bear Market In Metals?

By Avi Gilburt, ElliottWaveTrader.net

First published on Saturday May 13 for members of ElliottWaveTrader.netWithout fail, each and every time the metals have dropped since bottoming over a year ago, many panic and proclaim the bear market to have returned.  Moreover, many have looked to the USD as their guide to what the metals will do, and are completely befuddled when the dollar trades in tandem with the metals, as we have seen for almost two months.

As for me, well, since I was taught at a young age not to “ASSUME,” I only listen to price and try to ignore emotion as much as humanly possible.  For this reason, I rely on my analysis to make decisions, as relying upon emotion often puts you on the wrong side of the market at the exact worst time. (more…)

Are You Done Looking for a Stock Market Top?

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By Avi Gilburt, ElliottWaveTrader.net

After the market bottomed at the 2330SPX support we noted weeks ago, it has continued higher towards our ideal target at 2410SPX on Friday, after spending the week in a sideways consolidation.

If you are done looking for a market top, well, so are many other bears. After this past week’s move (which we called for), more and more bears are waving the white flag. And the reason, which amuses me the most, is that they are claiming that “the fundamentals now support a higher S&P500.”

As I have warned many times in the past, market fundamentals are a lagging indicator. I have explained it in great detail in prior articles:

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Consolidation Takes More Time

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I Still Think the Consolidation Takes More Time

By Avi Gilburt, ElliottWaveTrader.net

First published on Saturday April 22 for members of ElliottWaveTrader.net   With the GDX breaking below the 24 level this past week, it has strongly suggested that it is not yet ready for a parabolic run.   And, as I noted during the mid-week update, it even opens the door to another drop below the March lows before the parabolic run begins:

“. . . the issue I have with it is that the high was struck into an a=c target, which most often denotes a corrective rally.  It is for that reason that I wanted to see the .618 extension of that rally hold so that I can continue to view it as an impulsive structure.   But, Fibonacci Pinball suggests that once that .618 extension breaks resoundingly, the greater probabilities shift towards that rally being a corrective rally.  For this reason, I am viewing the yellow count now as a much stronger potential.”

“Moreover, I will note that if we can see a higher high made in the GDX in the coming week, then I can consider the pattern as a leading diagonal up for a wave (i) as modified on the daily chart.  Yes, I know this has gotten more complex than I had wanted, but I am trying to maintain an open mind to the potential I am seeing in the market.”

As of the weekend, my perspective on GDX remains the same.

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