Beware Of Delusional Market Timers

This past week has seen a lot of whipsaw. But, from an Elliottician's perspective, it was to be expected, as the market has been tracing out a b-wave within a corrective 4th wave structure. This is the most variable segment within Elliott's 5 wave structure, and typically acts just as we have seen over the last few weeks.

As the stock market hits heights which have surprised most market participants, we have seen many market participants maintain a bearish bias through most of the rise because the "fundamentals suggest the market should not be this high."

They review data published by research firms supporting their thesis based upon earnings, money flow, margin debt, GDP and a myriad other "reasons" as to why the market should not be this high. They have developed a certain amount of comfort in "knowing" that they are not wrong, but, rather, it's the stock market which is wrong, despite the market continuing its march higher. Moreover, they take further comfort in their belief that other investment advisers share their bearish perspectives.

But, as Jesse Livermore would say, "A prudent speculator never argues with the tape. Markets are never wrong, opinions often are."

However, they still maintain their bearish eye towards the market, as it is the "reasonable" thing to do, because "it will all turn out very, very badly." But, do not fret, as they will eventually be proven right within "5,10 years from now."

And based upon such "logic," we will all die in the end so let's just give up right now. I mean, claiming that "it will all turn out very, very badly" within 5-10 years is not exactly analysis by which one can invest.

Of course, the market is going to strike a long-term top. I mean, "duh." But, should we run and hide our money because it is going to happen in the future? Many of these analysts have been claiming the "crash is upon us" for years, and the only thing they have certainly proven is that THEY cannot tell you when it will happen. So, they simply malign anyone else that does not believe as they do through name calling. As some of them put it, everyone who does not see the market as they do is simply "delusional" and "wrong," even those that expected the market to reach these heights.

I have written in the past many times about these types of investors and analysts. Moreover, I have written in the past about why such bearishness sells among the masses.

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Avi Gilburt is a widely followed Elliott Wave technical analyst and author of ElliottWaveTrader.net ( more

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