Reading most metals analysis in 2017 has been like watching a tennis match with the analysis going back and forth over the net between bullishness and bearishness. As the market reaches its highs, analysts turn bullish, and as the market reaches its lows, analysts turn terribly bearish. And, when the sentiment of the market has reached these extremes, it has marked the point in time when the markets have turned.
As I have also tried to warn all year, anyone who uses trend lines as their primary method of analysis has been terribly whipsawed, as the metals love to exceed trend lines right before they reverse strongly. This is one of the biggest reasons many have become terribly bullish at the highs (right before the market has reversed), and terribly bearish at the lows (right before the market reversed as well). So, does your neck hurt from all this back and forth during this whipsaw? (more…)
For the last year, I have been looking for what we classify as a wave (3) to strike the 2500SPX region. And, now, we are getting quite close.
Meanwhile, this rally has brought out two camps of market expectations at this juncture, both of which I believe are wearing blinders. We read about those who believe the markets basically have no limit to their upside, and are “virtually risk-free,” and we read those who have “known” that the market will imminently crash during this entire 40% rally since February 2016.
Do you know who Goldilocks is?
NOTE FROM TIM: The item below was written by Avi at Elliott Wave Trader. Speaking for myself, I am bearish on gold (and even moreso on miners). I am short GDXJ and have a long position in JDST. Here, on the other side of the coin, is Avi’s point of view…………
First published on Sat Jul 15 for members of ElliottWaveTrader.net: While I would love to suggest that we have begun the next larger degree rally already, the market has not provided me with strong indications that is going to be the case just yet. While there are many indications that the market may have already bottomed, there are just as many indications that we may see the dreaded one more lower low before a lasting bottom may be seen. But, I believe an investor should be preparing now for an impending rally which I believe will likely take hold over the coming weeks.
Now, whether we see that lower low or not, I want to highlight something of which you should definitely take notice, especially if you are bearish this complex. Please take a look at the attached daily GDX chart.
Last week, I noted to members: “As long as last week’s low is not broken, the market still has a set up in place to rally up towards the 2500SPX region.”
And, as we saw, the market has rallied up towards our long-term target region. The high we struck on Friday is now only 24 points from the bottom of our long-term target box, which we set several years ago.
Since bottoming back in February of 2016, the S&P500 has rallied 38%. That is one of the best runs in the market’s history. But, were you prepared for it?
Overview Of The Metals Market
First published on Sat Jul 8 for members of ElliottWaveTrader.net: As I see many metals investors and traders begin to throw in the towel, I wanted to take this opportunity to again explain why I will not count myself amongst them just yet. However, I will explain below what it would take to have me begin to look for lower lows in the overall complex relative to 2015, since I have been asked so often. (And, I usually get those questions as the market bottoms and begins a strong rally).
While the market did not follow through on the immediate bullish set up I outlined over the last several weeks, it does not invalidate the larger degree perspective we still see in the market. And as sentiment becomes more and more bearish, there are many more signs that a strong rally is setting up to take hold. But, again, even though the smaller degree immediate bullish set up invalidated, and we will have to await the next one to set up, I think that anyone aggressively maintaining on the short side of the market will likely overstay their welcome.
For the last several years, when we were still below the 1800 region in the SPX, we have been prognosticating that the market is going to head to the 2537-2611SPX region before any correction will be seen. Thus far, the market is still on target.
As George Santayana wisely said, “Those who do not remember the past are condemned to repeat it.” And, it seems that Ms. Yellen is forgetting her history.