Sentiment Speaks: Many Find My Views Crazy
By
Avi Gilburt
Sadly, investors today are way too superficial in their thinking. They view their world as either black or white, whereas most of life occurs within the grey. Yet, despite the world mostly occurring within the grey, most investor’s desire is to only be fed black or white perspectives in the analysis they read. In fact, most never come to the realization that such desires will never be able to assist them in their long-term goals in the non-linear-based financial market.
You see, the great majority of analysts you may read either take a constant bullish view (the perma-bulls) or a constant bearish view (the perma-bears). But, as one of my members noted, I am focused on being perma-profit, and I do not care for perma-anything narratives.
My analysis focuses on the grey, as I am never perma-bullish or perma-bearish. I simply analyze what the market tells me, and I provide analysis based upon my objective reads – no matter whether it tells me we are going up or down. Those that have followed me during the 13+ years I have been writing publicly know that I am not always right, however, our track record is 70%+ based upon what our followers have tracked during that time.
As a member who has been with us for a decade noted:
“The number of different markets, i.e., TLT, Metals, Oil, IWM, SPX etc.., that you have absolutely nailed over the years is legend.”
But, those who read my analysis with their black and white glasses securely in place come to a superficial conclusion that I am saying that the market is either going to go up or down. They fail to grasp that I provide very specific levels to watch in the market which will define the path the market will take. And, I have seen no other analyst with our track record over the last 13 years, nor one that has provided that type of specific guidance. And, do you really believe that almost 9000 investors worldwide and almost 1000 money managers would be clients of ours if we were not truly providing more than superficial analysis?
Yet, when I make a market call, it is often called “crazy,” “absurd” or “based in magic or voodoo.” For example, when I suggested the market would begin a 30% drop in early 2020, before anyone even uttered or heard of the word Covid, many thought that to be crazy. But, when I then called for a bottom in the 2200SPX region, followed by a rally to 4000+, during a period of time when the Covid death rates were skyrocketing, economic shut downs were seen world-wide, and unemployment was hitting record levels, I saw the following comments:
“Your analysis seems to suggest that this current downturn is temporary and that the bull market won't truly end until we hit around 4000? That's pure technical analysis without any regard for fundamental factors in the real world. The idea is absurd. We are not going to magically get there on the back of EWT.”
“Here is the 2200 exactly that you said the S&P would bottom at before taking the trip back up to 4,000... What do you want to bet the ECONOMY is going to pull it down a lot further and that 4,000 is a lot further away than your charts ever said... my own resolution is that this market has a lot further to fall because it is now following the economy, which it long divorced itself from; whereas Avi doesn't believe the economy ever means anything to stocks and has told me so several times last year... So, you have that common sense view, or you can believe Avi's chart magic will get you through all of that and is right about a big bounce off of 2200 all the way back up to 4,000.”
And, this is nowhere near the first time that my analysis has been called names. In fact, my first public market call was made back in the gold market on August, 22 of 2011:
“Again, since we are most probably in the final stages of this parabolic fifth wave “blow-off-top,” I would seriously consider anything approaching the $1,915 level to be a potential target for a top at this time.”
At the time, gold was in the midst of a parabolic rally, and the only discussion between analysts and investors at the time was centered around how far past $2,000 gold will take us. No wonder I was vilified for my expectation for a top in gold. And, even before we topped, when someone asked me in the comments section where I see this drop from $1,915 taking us, I outlined my view that we will likely see the $1,000 region. As we now know, gold topped at $1,921 and bottomed a little over 4 years later at $1,050.
But, if you really understand how the common investor’s mind works, it is quite clear that an expectation of a market turn is going to be viewed as crazy or absurd when the current trend is certainly engrained within the minds of the masses. Yet, that is often when we see such turns occur.
For those that want to move beyond the superficial perspective of our work and develop a bit deeper understanding of what we do, you can feel free to read this 6-part series I wrote a number of years ago:
Those that have taken the time and put in the effort to learn what we do have seen life changing results:
“I cannot stress enough how much this site not only changed my entire approach to investing, but my life as well. Game-changer is an understatement.”
A number of years ago, I published my expectation that this bull market will likely take us to the 5350-6000SPX region before it ends. And, while there is some potential that it can see a bit higher than that, there is no question in my mind that the longer-term trend is coming to a conclusion, as I have written and explained in a number of prior articles. Yet, the trend is now so engrained in most investor and analyst minds that I am starting to see a number of commenters and analysts poke fun at my work again. Well, based upon history, it means I am likely to be proven right again, as the sentiment has now turned decidedly bullish enough to form the long-term top that I expect in the S&P500.
Moreover, while we are not quite there yet in the gold market, I am also seeing that we are approaching a major top in gold in the coming 12-18 months, which is my general guestimate on the timing right now. Rather, I am more focused upon when the structure of the current gold rally completes, at which time I would expect a major top to be struck in gold too. But, we are not there just yet. And, again, my downside target seems to be in the $1,000-$1,200 region when this multi-year correction begins, with a smaller probability pointing down as low as the $300-$500 region. Again, this lower target is a much lower probability at this time.
I am going to conclude with a suggestion to all who read my work. If you choose to retain a superficial view of our work, then you will always view it as saying the market is either going to go up or down. However, if you take a more mature approach, and delve a bit deeper into the specifics of what we do, then it will open an entirely new world to you in your view of market mechanics. It will likely forever change your perspective on how the market works. And, you will likely not be surprised by any major market moves, as most moves are quite foreseeable, at least from a probabilistic perspective.
