Avi Gilburt – The Stock Market Is Not Even Close To A Major Top – So Don’t Believe The Hype.
Avi sent me this last night and unfortunately I dd not have wifi. I am posting it now because I think it is relevant for everyone watching the market. Avi has had a bullish outlook for the markets while a number of commentators around the web keep looking for a big drop. This latest piece outlines why he thinks the market is set up for the 3rd wave which for Elliot Wave technicians is the strongest wave. It is important to read closely what he is saying becuase Avi provides specific months that he thinks the market will top and when pullbacks will happen. Here are a couple sections we should all note…
“I had initially expected some kind of pullback this month before we made the run towards my target. But, with so many market participants continually shorting this market, thinking it is about to crash, the short covering has certainly propelled us higher and faster than even I had immediately expected. …
As you can see from my attached 60-minute chart, as long as we hold the 2320/30 micro support zone, I expect at least one more rally towards the 2370 region on the SPX. However, as I have it labeled in yellow, that could be all we get on this current rally segment. Yet, my “preference” is still that the next high we strike will only provide us with a pullback to retest the upper micro-support region between 2320/30, setting us up for the final push higher to 2400 in mid-March. …
Clearly, the market has not seen much in the way of a pullback in quite some time. However, I foresee that as ending quite abruptly once we have a confirmed wave (iii) completed, whether it be from the 2370 region or the more extended 2410/40 region . …
I simply believe we will see a very strong pullback in the market, potentially back to the 2240-2300 region on the SPX (depending upon how high this rally takes us). That pullback will then set up the next rally phase to the 2500 region, which will likely complete as we approach the summer, or maybe even early on into the summer, as you can see from the attached daily chart.”
I know that’s a very technical outlook but let’s watch closely what happens. Avi has been pretty spot on recently.
Here’s the full report.
The Stock Market Is Not Even Close To A Major Top – So Don’t Believe The Hype
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, 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, as you can see from the chart of our market calls during 2016.
While I have clearly been quite bullish since February of 2016, it seems I was not bullish enough over the last few weeks. Although my target has been 2400-2440 on the SPX for this current run, I had initially expected some kind of pullback this month before we made the run towards my target. But, with so many market participants continually shorting this market, thinking it is about to crash, the short covering has certainly propelled us higher and faster than even I had immediately expected.
Due to the fact that we went directly higher without a pullback suggests that we MAY come up a bit short of our ideal target region for this rally segment. As you can see from my attached 60-minute chart, as long as we hold the 2320/30 micro support zone, I expect at least one more rally towards the 2370 region on the SPX. However, as I have it labeled in yellow, that could be all we get on this current rally segment. Yet, my “preference” is still that the next high we strike will only provide us with a pullback to retest the upper micro-support region between 2320/30, setting us up for the final push higher to 2400 in mid-March. But, again, due to the direct nature of this rally, I am less confident about that potential at this time, although it really fits best within the overall structure.
Clearly, the market has not seen much in the way of a pullback in quite some time. However, I foresee that as ending quite abruptly once we have a confirmed wave (iii) completed, whether it be from the 2370 region or the more extended 2410/40 region. You see, we follow a theory of alternation when analyzing patterns using Elliott Wave analysis. When the 2nd wave is a sideways and long consolidation, as we had from August to early November of 2016, we expect the 4th wave to be a sharp drop and a bit deeper.
Therefore, once this 3rd wave segment completes, I expect volatility to return to the market and strongly. In fact, I am quite certain you will hear calls that we have struck a long-term top in the equity market and that we are going to crash. However, I believe there is a low probability for that to be the case. But, I can assure you that many will believe it to be the case, and you will likely be bombarded by the media with such expectations. Rather, I simply believe we will see a very strong pullback in the market, potentially back to the 2240-2300 region on the SPX (depending upon how high this rally takes us). That pullback will then set up the next rally phase to the 2500 region, which will likely complete as we approach the summer, or maybe even early on into the summer, as you can see from the attached daily chart.
Again, I want to prepare you for the expected market calls you will certainly hear within the next month or two about the market hitting a major top. You will likely hear it over the next few months, and then again in the early fall, after we complete our next rally phase. But, my expectation is that we will not likely see a major top to this market until the end of 2017 or early 2018, after which time we can experience a 15-25% correction. Until then, I expect we will attain our target set out years ago in the 2537-2611 region. (Although, I still maintain a smaller probability at this time that we could see a blow off rally taking us as high as 2800 by early next year).
See charts illustrating the wave counts on the S&P 500 at https://www.
Avi Gilburt is a widely followed Elliott Wave technical analyst and author of ElliottWaveTrader.net (www.
Wow, Marty, I think you nailed a significant low. Watch that pitchfork support/resistance level that it climbed above this morning:
http://stockcharts.com/h-sc/ui?s=CDE&p=D&yr=0&mn=9&dy=13&id=p20042064581&a=505652961
Brixton Metals has been up nicely today in a range of 13-20%. Nice to see.
Yes, it made a high-volume move to the 150 day MA (+22%) before stalling. It has remained well above the upper Bollinger band (.47) so far, which shows strength.
http://stockcharts.com/h-sc/ui?s=BBB.V&p=D&yr=0&mn=9&dy=13&id=p49835779967
Thanks for that chart. It illustrates the gap up nicely.
Ex, whatever you focus on, grows!
There is power in focus my friend. Wishing you all the best Marty.
Thanks, Matthew. I bought some @9.5. Maybe I should get more CDE instead of PPP.
Do you own CDE?
I do not own CDE but I did add to PPP very close to the low today — which was probably caused by a bear at Seeking Alpha.
http://seekingalpha.com/article/4047624-primero-mining-mine-strike-spells-doom-company
Thanks, Matthew. That PPP article makes me feel that CDE is safer, and it is down from 75 and should soar when silver goes to $200/oz I’ll keep my PPP too.
Agree re the Seeking Alpha comment. I bought another 22,000 shares of Primero this morning as well.
Bill claims “NYSE Pump& Dump” on ABX and GG: http://www.stocktipster.net/index.php/2017/02/21/nyse-pump-dump/
Who is Bill to say that those stocks rocketed “unnaturally” last week? The action look natural to me and I wouldn’t worry about any attempt to “pump and dump” two of the largest gold miners in the world.
GG:
http://stockcharts.com/h-sc/ui?s=GG&p=W&yr=1&mn=9&dy=0&id=p13496008085
He called it a “limited pump and dump” yesterday (https://www.youtube.com/watch?v=CWL-YSo7OKc). It was a very poor buying plan at the very least.
How often do big time operators do it that way?
BDC – most buyers, small or large, routinely use very poor buying plans. One good example is AXU in 2011. The company raised over $30M at $8.00/sh in a private placement. Participants were “sophisticated” accredited investors. AXU went slightly higher afterward but then spent the next few years falling to 22 cents.
Btw, .22 was a bargain but you can rest assured that most of the market did not see it that way.
http://stockcharts.com/h-sc/ui?s=AXU&p=W&yr=3&mn=3&dy=22&id=p84743828522&a=508198965
Here are some other comments from that day, 1/19/16:
http://www.kereport.com/2016/01/19/bottom-commodities-place/
Agreed Matthew – I’ve never heard of anyone being able to pump and dump Barrick or Goldcorp. They are too widely held, have too much liquidity, and are the largest Gold miners out there.
“Pump & Dumps” happen when tons of liquidity and share price appreciation pours into a previously illiquid stock that has been floundering, when little has changed in it’s narrative other than massive promtion. Then after the stock goes up in a parabolic way, gravity takes over and it comes crashing back down, because there was no real fundamental driver ….. only speculation.
If people want a prime example of a “Pump & Dump” that just occurred, they need to look no further than Northern Dynasty….
I knew that stock was getting way ahead of itself, and worried with some of those involved (Doug Casey, Stanberry, Marin Katusa) that it may turn into a real pump and dump. First clue was that there was no real progress made on getting the permit, and all the promotion was predicated on the idea that Trump was going to reign in the EPA and make them change their decision on that project. That is all PURE speculation and there were no fundamental reasons for that stock to have taken off, gotten all the attention, and had the huge liquidity / share price appreciation except from pure pumping from a group of newsletter writers.
Northern Dynasty Pump & Dump Chart:
http://stockcharts.com/h-sc/ui?s=NAK&p=D&yr=2&mn=0&dy=0&id=p62391164143
the fallout just today has been epic. It’s sad to me because many unknowing investors got hoodwinked at the upper levels and got hosed, and now they’ll be angry at Gold or Copper mining, when the real villains were the newsletter pumpers that forced this stock waaaaayyyyy higher than it ever deserved. We discussed it on here multiple times as an example of Trumphoria speculation running wild.
Northern Dynasty Minerals Ltd. (NAK)
$1.64 down -$ 0.62 (-27.44% loss)
Those volumes were not mom & pop buyers — they’re likely fund managers who know exactly what they’re doing.
Agreed. Big Boy selloff.
Tripping the sell stops all the way down….
Yes, BDC, and the funds they manage belong to mom & pop. Collectively, dumb money is huge.
Yes, Matthew, but they (once had) have a fiduciary responsibility not to defraud them.
Frauds of that sort are extremely difficult to prove since many accepted strategies involve buying strength or technical breakouts, etc. — not to mention fundamental developments that a manger might point to.
In addition, the large positions that institutional managers seek often make pushing the price much higher unavoidable. Then there’s their time horizon; what looks fraudulent in the short term could prove to be heroic in the long term.
“…extremely hard to prove….” doesn’t make it not so. — Use your eyes.
Considering the current FED rates environment, Bill has made a more than valid point.
Of course it doesn’t make it not so. There is simply nothing unusual about such volume spikes. It is more reasonable to assume that top-calling shorts were forced to cover when unexpected strength showed up. After a 40%+ move in just two months, the action makes perfect sense. I can assure you that it wasn’t just one or two entities that accounted for that volume.
Like most of the market, Bill’s expectations were simply wrong. The entire sector has confirmed this, not just ABX and GG. The “current Fed rates environment” is obviously not as negative for the sector as he thought.
Bull markets leave most participants behind and very frustrated.
Valid points, but from his other comments, Bill is a short term bear, and looking for Gold to go “To the Moon!” once downside weaknesses are resolved.
The difference of opinion is only on timing.
Looking at the daily chart, we can see why he, and many others, have been looking for a pullback and that pullback should start soon, so many were just early.
It will probably be a shallow pullback because the weekly chart looks so much better (the bullish weekly chart is probably what delayed the pullback).
Getting back to legitimate volume spikes, take a look at GDXJ on Feb. 5th and 6th:
http://stockcharts.com/h-sc/ui?s=GDXJ&p=D&yr=0&mn=9&dy=13&id=p14257136450&a=481625016
Matthew – Great point about the current Fed rate environment having not been as bad as many expected, and it didn’t stop the Gold & Silver miners from putting in another nice rally here in the 1st quarter of 2017.
You are correct that there is not any institutions or people large enough to have single-handedly moved Barrick and Goldcorp and it those are far too widely held and followed.
The proof in the pudding (as you mentioned) is that the whole precious metals mining sector rallied coming out of tax loss selling season last year and into this year and shrugged off the nonsensical Fedbabble (as it should). Real rates are still bottom dwelling despite the Fed’s 2 paltry .25 % hikes and are a non-issue.
Katusa answers back with another Northern Dynasty promotional pump today.
He interviewed David Lowell, who is a mining legend and has absolutely earned respect, because he is an advocate and shareholder of NAK. They do a good job discussing the economics of the Pebble deposit in Alaska, to counter the short-selling campaign from Kerrisdale Capital last week.
In Northern Dynasty’s defense, the Kerrisdale Capital folks are sleaze-balls, and many of the objections they raised in their hit piece were partially inaccurate. This pump piece tries to point out how good the economics are and why the local community should want it for the job creation, which are good points….. However, they still dodged the 800 lb gorilla in the room, which is that this Pebble project is not getting permitted anytime soon with so much resistance against it due to the Salmon issue and their waste storage issues. It’s not about whether the project is well endowed or whether a mine of that size would employ people. That’s been clear for the last decade.
The real issue that has many investors that have followed this story for years is that all of this was already known, but they hit a dead end. The reason this story has been re-animated, like Frankenstein, was due to how much emphasis that Doug Casey, Stansberry, Katusa and others put on how the Trump administration would be clearing the path with the EPA to get this project permitted. That is PURE speculation and they give the new administration too much credit.
It seems dubious at best, and all of this recent runup in share price came strictly due to their promotional bombardment in the mining community. They are targeting newer retail investors that probably forget Stansberry & Casey were pumping this same project back in 2009 and guess what……8 years later…..there still is no mine being built and the project is blocked.
Until that changes, the share price had no business making a run like that and these are the kinds of promotional antics that give this industry a black eye and hurt investors that follow these gurus assuming that due to their inflated reputations that they’ve done all the due diligence for them. It’s a sad story of the “madness of crowds” fueled by self-serving newsletter writers, and this latest episode rhymes with some many past newsletter wild goose chases and puts a sickening feeling in the gut of anyone with a conscience.
__________________________________________________________________________
One of the World’s Greatest Geologists Talks Northern Dynasty’s Pebble Deposit
FEBRUARY 21, 2017
https://katusaresearch.com/one-worlds-greatest-geologists-talks-northern-dynastys-pebble-deposit/
Ex, interesting reading but anyone who is involved in trading stocks better remember that playing the market is 1000% gambling, I don’t care how savvy you may think you are. DT
At any time this market could crash and anyone invested in any segment of the market will experience losses and in some cases catastrophic ones.
DT, you are correct that playing the market is gambling but the same can be said of just about anything we do. There are no guarantees, but there are vastly different risk profiles to choose from.
Matt, markets are very cruel to most investors, the shorts have a purpose and so do companies like BRE-X, most people need to feel the pain for any rational semblance to remain, but as you point out there are levels of pain and pleasure that drive us to invest or gamble. Without which there would be very little need for a market. DT
I would say that most investors are very cruel to themselves. Most put very little effort into their investing education yet are still surprised when they end up with casino results.
My point was that market risks can be dramatically reduced pretty easily.
Good discussion guys. Yes, there are risks associated with Life in general (getting into a car, crossing a street, going for jog at an elevated age, eating shellfish, having intercourse without protection, keeping your money in fiat currencies, and There is some risk that is completely out of our control (like if a Tornado wipes out your house); but conversely, there is also risk that is manageable like how much weight you decide to bench press, what kind of foods & beverages & chemicals you decide to put into your body, and what kind of investments one decides to choose.
The key word is “DECIDE”. “Cide” means to kill like Suicide or Homicide. To De-Cide is to “kill the options”.
That is what investors are doing when they “Decide” to pick a certain stock over the universe of available stocks. They are killing the other options and going with a particular company or ETF at the exclusion of the others. This is 100% in the control of the investor, because they don’t have to invest at all.
This is where the research and due diligence process comes in to reduce and better understand the risk. Taking into account both the fundamental & technical set up helps to make targeted risks and projects somewhat less risky.
As we’ve discussed on here since Northern Dynasty first resurfaced. The stock is damn risky, has been shelved for a decade, and I’ll say now what I said then…. Until they get that permit in place and the social license, and find a way to make it a win win, then I wouldn’t touch it with 100 ft pole.
As expected the lawsuits are flying due to the losses and the company not properly disclosing the economics or viability or negative NPV……. Now, in hindsight, the investors are doing their due diligence, but if they had researched the past history of this project, or spent any time on line looking into it, then they would have realized all of this before jumping on the pump train…..
____________________________________________________________________________
* The Law Offices of Howard G. Smith Announces the Filing of a Securities Class Action on Behalf of Northern Dynasty Minerals Ltd. Investors and Encourages Investors to Contact the Firm
Tuesday 02/21/2017 03:45 PM ET – BusinessWire via Dow Jones News
“Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors who purchased Northern Dynasty Minerals Ltd. (NYSE: NAK) securities between September 16, 2013 and February 14, 2017, inclusive . Northern Dynasty investors have until April 17, 2017 to file a lead plaintiff motion.
** NAK INVESTOR ALERT: The Law Offices of Vincent Wong Notifies Investors of a Class Action Involving Northern Dynasty Minerals Ltd. and a Lead Plaintiff Deadline of April 17, 2017
Tuesday 02/21/2017 11:40 AM ET – GlobeNewsWire via Dow Jones News
*** Lifshitz & Miller LLP Announces Investigation of Centrue Financial Corporation, Motorola Solutions, Inc., Natus Medical Incorporated, Northern Dynasty Minerals Ltd.,
Friday 02/17/2017 05:11 PM ET – PR Newswire via Dow Jones News
**** SHAREHOLDER ALERT: Levi & Korsinsky, LLP Files Complaint to Recover Losses Suffered by Investors in Northern Dynasty Minerals Ltd.
Friday 02/17/2017 03:19 PM ET – GlobeNewsWire via Dow Jones News
Well, now we know which cide you’re on. 😉
I’m actually tempted to jump in for a dead cat bounce (but just for a quick swing trade). I’ll have to look at the charts and De-Cide…… 😉
That’s the spirit!
It does look rip for a dead cat bounce. Shorting pole from 100 feet to 6 feet and poking the kitty…. Meow.
rip = ripe (although R.I.P.) may have been appropriate (haha!)
Shorting = Shortening
Meow = MEOW!
AUY being heavily shorted……don’t know why.
Yamana Gold: It’s Just Not Good Enough
Feb. 20, 2017 – Gold Mining Bull (5,287 followers on Seeking Alpha)
Yamana Gold – All You Need To Know About The Q4 2016 Results
Feb. 20, 2017 – Fun Trading (5,312 followers on Seeking Alpha)
Trump Iran policy?
https://btr-grass-01.blogtalkradio.com/1000526017–834249348.mp3
I saw this other Avi article and thought this would be a good place to post it:
Sentiment Speaks: Would You Rather Be Right Or Rich?
Feb. 20, 2017 – Avi Gilburt – Seeking Alpha
http://seekingalpha.com/article/4047565-sentiment-speaks-rather-right-rich?ifp=0
NDM will be back I got out in time, but I wouldn’t look at this stock as being an Alice and Wonderland special, when the radiation from Fukushima destroys the fishing, and Trump’s infrastructure build out becomes reality, the Alaskan natives will need Northern Dynasty’s Pebble deposit. You can’t have welfare and infrastructure going ahead at the same time, the future of pretending that money is plastic and we just have to keep building debt is gone. How do you want to live? If you don’t move forward with development then you get Venezuela, or Rochester New York. The choice is ours but without infrastructure you can’t move forward only backwards. DT
Fauxushima Radiation
“Photos that claim to show the effects of the #Fukushima #nuclear disaster on marine life are actually cribbed from various unrelated corners of the internet.”
In February 2016, a series of photos purportedly showing the ill effects that the Fukushima nuclear disaster had on marine life was widely shared on social media. A popular Facebook post, which appeared to be a rewrite of an article published by web site Superstation95 in October 2015, reported that North Americans were eating seafood filled with “cancerous tumors”:
“While the Daiichi meltdowns and subsequent radiation releases did have a major effect on aquatic life, these photos do not illustrate those effects. For instance, the lead photo of the article, purportedly showing the “bloody” and “cancerous” tumors caused by nuclear radiation, was actually taken in 2004, years before the Fukushima disaster started leaking radiation into the sea:”
The article then shows a picture of “cancerous tumors in salmon” purportedly linked to a rise in nuclear radiation in oceans:
“Again, however, the above-displayed image was taken prior to the Fukushima disaster. The image also does not show cancerous tumors, or any type of tumor at all. Instead, it was lifted from Wikipedia, and shows a salmon infected with with Henneguya salminicola, a myxosporean parasite.”
“Another misleading photo featured University of Alberta scientist David Schindler holding a fish with a growth. The article reported that this image depicted a fish “showing classic signs of radiation-caused cancerous tumors,” but Schindler said that the fish was taken from the Athabasca River watershed, which is downstream from an oil sands industrial development — not a nuclear plant:”
*The article goes on from there with example after example…… There is plenty of “fake news” about the dead seafood or things being tagged as effects of Fukushima that are 100% BS. People that don’t do research on the #Nuclear industry or facts about what the risks are, and take all their news from YouTube reactionary videos will stay paranoid and uninformed.
Bought 30 RSI 250 sh @ 8.69. CDE