Back in the 1930s, an accountant named Ralph Nelson Elliott discovered that financial markets are fractal in nature. This means that they are variably self-similar at different degrees of trend.
To that end, he explained that when a market is trending, it will most often display a rather predictable 5-wave structure. As an example, this structure is what allowed us to predict the rally from the 1800 region on the S&P 500 (SPX) to over 2600 back in 2016, along with our expectation for a “global melt-up,” which we reiterated at election time “no matter who won.” It is what also allowed us to predict the bottoming to the bond market in late 2018, wherein we bought TLT in the 112-113 region, as well as the rally in metals in 2019.
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