How this "Popular Bull-Market Strategy" Can Backfire -- Big Time

By Elliott Wave International

"Buying the dip" might work in a rip-roaring bull market, but it can cost you your shirt in a severe downturn.
Even so, this March 23 Wall Street Journal quote represents the mindset of many global investors:

I'm Scared. That's a Reason to Buy.
The true contrarian only buys when it makes him feel physically sick to press the buy key.

This was a more dramatic version of the clarion call from a number of financial websites in late February to "hang in there."
But, "hanging in there" and "buy the dip" are much more dangerous propositions in a ferocious bear market -- especially for the "buy and hold" crowd.
Elliott Wave International's April Global Market Perspective provides a history lesson with this chart of Germany's main stock index during the bear market years from 2000 to 2003:

Over the course of a financially catastrophic 73% decline, the index experienced at least eight countertrend bounces of 10% or more. The largest rally -- a 54% behemoth that followed the World Trade Center attacks in the United States in September 2001 -- petered out by March 2002. Any dip buyers who got lured back in went on to suffer a disastrous 60% sell-off into the final bottom. And even the few investors who perfectly timed the September 2001 low lost 38% over the next 18 months.

Now, some market observers may say that investors who "hold" or "buy the dip" throughout a deep bear market will eventually come out ahead during the next bull phase.
Probably. Except, it may be years away. Japan's NIKKEI, for example, famously topped in 1989 and has not revisited that high since. China's Shanghai Composite topped in 2007 and has similarly stayed subdued. How many years will most investors wait before they "throw in the towel"?
Moreover, badly battered investors are afraid to commit to a new uptrend just when it's the most advantageous time to do so. At this point, shaken investors believe up days in the market are "head-fakes."
Indeed, the market has a way of fooling most investors at key market junctures.
By contrast, learning the rules and guidelines of Elliott wave analysis can help an investor anticipate significant trend turns in financial markets.
Read this quote from the Wall Street classic book, Elliott Wave Principle: Key to Market Behavior, by Frost & Prechter:

By knowing what Elliott rules will not allow, you can deduce that whatever remains is the proper perspective, no matter how improbable it may seem otherwise. By applying all the rules of extensions, alternation, overlapping, channeling, volume and the rest, you have a much more formidable arsenal than you might imagine at first glance. Unfortunately for many, the approach requires thought and work and rarely provides a mechanical signal. However, this kind of thinking, basically an elimination process, squeezes the best out of what Elliott has to offer and besides, it's fun! We sincerely urge you to give it a try.

And, there's no better time to give it a try than now.
Indeed, Elliott Wave International is now offering a 1-hour course (through May 15) on how to identify an Elliott wave pattern on a price chart. Plus, you'll get insights on how to develop a trading plan to take advantage of your new-found knowledge.
The title of the course is The Wave Principle Applied and it's free to Club EWI members. Joining Club EWI is also free. Join now to take advantage of this limited-time offer.

This Major Stock Market Indicator is Flashing a HUGE Signal

Here's what should happen during a bear-market rally as sentiment rises

By Elliott Wave International

A question was posed to Elliott Wave International President Robert Prechter for a classic Elliott Wave Theorist (Prechter's monthly publication about financial markets and social trends since 1979):

Under the Wave Principle, what is the most important thing to watch other than price?

Prechter answered:

Volume.

You see, high trading volume means that traders are displaying a great deal of conviction about a given market, whether the trend is up or down. Low trading volume means a lack of enthusiasm.
In other words, during strong bull markets, up days are often accompanied by high trading volume, while countertrend declines usually occur on low trading volume. In bear markets, down days are generally powered by tons of trading volume with rallies occurring on weak volume.
When a bear market is near an end, price declines usually begin to occur on contracting volume. Likewise, when a bull market is exhausted, price rises are usually accompanied by waning volume.
For example, here's a chart and commentary from EWI's Oct. 5, 2007 U.S. Short Term Update:

Note how weak the volume pattern has been in the push from the August 16 low, which is one of the reasons that we keep saying the rise is "narrow." The middle clip on the chart shows the 10-day average of NYSE New Highs minus New Lows, showing yet another indicator that is lagging as prices make new highs.

Less than a week later, the S&P 500 index hit a then intraday record high before beginning a bear market slide.
Now, let's consider the current market environment, and this chart and commentary from the April 20, 2020 U.S. Short Term Update:

The power of a second-wave rally should wane as sentiment rises. So far, the market's advance since March 23 fits this profile. As the chart shows, daily market volume has contracted steadily as the advance has progressed. The 3-day average has come back to nearly the level it was in late-February, when the Dow was still above 27,000.

Now, let's get back to that question from the classic Theorist about "the most important thing to watch other than price."
The question itself implies that no other indicator is as important as price -- or price patterns, to be more exact. And that is absolutely correct.
As Frost & Prechter's Elliott Wave Principle: Key to Market Behavior notes:

Since wave analysis is based upon price patterns, a pattern identified as having been completed is either over or it isn't. If the market changes direction, the analyst has caught the turn. If the market moves beyond what the apparently completed pattern allows, the conclusion is wrong, and any funds at risk can be reclaimed immediately.

You can read the online version of this Wall Street classic book in its entirety -- 100% free. Simply sign up for a free Club EWI membership for instant access.

This article was syndicated by Elliott Wave International and was originally published under the headline This Major Stock Market Indicator is Flashing a HUGE Signal. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

How Price Gaps Help Traders Hit the "TARGET" of Opportunity

Here's how a bearish price gap on Target's chart foretold of the retail giant's Q1 2020 nosedive

By Elliott Wave International

As many of us continue the process of working from home, isolated with young children and significant others day in and day out, the subject of price gaps feels paradoxically fitting.
Here's why: After countless hours of sharing the same tight-knit space of finger-painting on the walls, dirty dishes, and zero social outlet, in comes your partner. You nervously ask, "Are you okay?" To which she replies with the most frightening of all four-letter "F" words,

I'm "F-I-N-E"

And that's when you know it's time to brace for impact.
"FINE," in its vacant hollowness, is the equivalent of a gap on a price chart. They are generated in extremely tense, emotional market environments when a spike in volume and volatility makes prices jump so fast that they leave an empty space on the chart.
Indeed, in today's emotional market environment, price gaps are everywhere, from bonds to bitcoin to big tech and beyond:

• "Price Gap Triggers Fear for Bond ETF's" (March 29 Yahoo! Finance)
• "A CME Gap at $3500 Leaves Bitcoin Vulnerable" (April 14 Bitcoinist)
• "Apple Gaps Below Key Moving Average." (April 2 The Street)

The question is, can you somehow use price gaps for your trading or investment decisions?
The short answer is, yes. A longer answer comes via Elliott Wave International's Trader's Classroom instructor Jeffrey Kennedy. Over the past few months, Jeffrey has built a strong, evidence-based case in favor of price gaps and their ability to clarify two main facets of a price trend:

1. The strength of the trend, and
2. Where prices are within their Elliott wave pattern

Case in point: Target, TGT. Early last December, well before the market mayhem, Jeffrey recognized a series of price gaps on TGT's charts. At the time, TGT was orbiting lifetime highs and mainstream analysts saw no end to the stock's upside, as this December 6, 2019 Yahoo! Finance confirms:

"Target (TGT) has been a star... The stock price keeps hitting new highs with its unending rally. Analysts continue to raise EPS estimates for TGT, propelling this stock into a Zacks Rank #1 (Strong Buy)."

In his December 3, 2019 Trader's Classroom, however, Jeffrey identified a so-called acceleration gap in the stock's August advance, a strong indication of third-of-third wave price action. That made the latest push higher a likely 5th wave and meant that the rally was closer to its end than its beginning, prompting this bearish forecast:

"The next sequence of events would be a pullback that could go into April," labeling common Fibonacci target for the decline.

The next chart shows what followed: In late December, Target turned down from an all-time high plummeting 25% before stopping at a seven-month low on March 25:

That was just one example of (very) many. Price gaps enhance your understanding of the Elliott wave pattern underway. They can also join forces with other technical tools to facilitate high-confidence forecasts.
Here's one more for you. In his February 18 Trader's Classroom, Jeffrey identified a bearish key reversal pattern and price gap on the chart of Skyworks Solutions, Inc. (ticker symbol: SWKS). Jeffrey told subscribers that,

"the risk is to the downside and we'll see further decline."

What happened next?
Well, in Elliott Wave International's brand-new, free educational video titled "See a Price Gap? Learn to Capitalize on Them," Jeffrey revisits Skyworks Solutions and shows you the outcome of his original bearish forecast:

You can see it all for yourself in Jeffrey's video lesson, where he covers these critical bases:

• What is a price gap?

• What are the 4 types of price gaps and when do they occur?

• Which price gaps coincide with specific substructures of an Elliott wave impulse pattern?

• What is the "closing the gap" trade set-up, and how is it used to identify high-confidence turns?

It's time to take your trading technique from "FINE" to fortified.
The best part is, Elliott Wave International is offering "See a Price Gap? Learn to Capitalize on Them" for FREE to all our Club EWI members.
Take 30 seconds to get instant access.

Deflationary Psychology Versus the Fed: Here’s the Likely Winner

By Elliott Wave International

Weeks before the February top in the DJIA, the January Elliott Wave Theorist (Elliott Wave International President Robert Prechter's monthly publication about financial markets and social trends since 1979) said:

Most economists believe the Fed can prevent financial crises and depressions. [EWI's analysts] disagree. Socionomic theory proposes that naturally fluctuating waves of social mood regulate financial optimism and the economy. They are unconscious and cannot be managed. [emphasis added]

In case you're unfamiliar with socionomic theory, socionomics is the study of how society's changes in mood motivate social actions in realms that include the economy, political preferences, financial markets, actions of peace and war, and the fads and fashions of popular culture. Robert Prechter began formulating socionomic theory in 1976.
Now, let's get back to the point that the January Elliott Wave Theorist makes about "naturally fluctuating waves of social mood" being unmanageable. Realize that if people's psychology shifts from expansive to cautious, there's nothing financial authorities can do about it.
That doesn't mean that central banks don't try.
On March 23, after the start of the swift financial downturn, Marketwatch had this headline:

Fed, saying aggressive action is needed, starts unlimited QE

Ironically, on that very day, the stock market declined even further.
But, looking beyond the action of the market, you can also get a good idea about the "fluctuating waves of social mood" from this chart and commentary from our April Elliott Wave Financial Forecast:

Changes in producer prices, a key deflationary indicator that tends to lead consumer prices, are already negative. The chart shows the persistent long-term slowing of U.S. producer prices on what Conquer the Crash maintains has been a steadily waxing precursor to deflation and depression. Noting PPI's movement back and forth across the zero line, CTC observed that "economists have had difficulty explaining why producer prices have been so sluggish. The short answer is that deflationary psychology is creeping toward gaining the upper hand, no matter what the Fed does."

It's evident that a deflationary psychology is taking hold globally.
Consider that PPI measures from January-to-February declined in Germany, China, Japan, the U.K, South Korea, Canada, France and Italy.
The closest that the world has come to deflation in modern times was the 2007-2009 financial crisis. However, the last full-blown deflationary episode was in the early 1930s. As you know, this period is known as the "Great Depression."
Robert Prechter's book, Conquer the Crash, explains why deflation, which is a decrease in the total amount of money and credit, goes together with a depression:

A deflationary crash is characterized in part by a persistent, sustained, deep, general decline in people's desire and ability to lend and borrow. A depression is characterized in part by a persistent, sustained, deep, general decline in production. Since a decline in credit reduces new investment in economic activity, deflation supports depression. Since a decline in production reduces debtors' means to repay and service debt, a depression supports deflation. Because both credit and production support prices for financial assets, their prices fall in a deflationary depression. As asset prices fall, people lose wealth, which reduces their ability to offer credit, service debt and support production.

Deflation and depressions are rare.
Yet, the swift downturn in global financial markets strongly suggests that this is a time to prepare for the next ones.
With that in mind, Elliott Wave International has prepared a free report titled "What You Need to Know Now About Protecting Yourself from Deflation", which you can access free when you join Club EWI. Membership in Club EWI is also 100% free.

This article was syndicated by Elliott Wave International and was originally published under the headline Deflationary Psychology Versus the Fed: Here’s the Likely Winner. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

In Every Bear Market, One Asset Always Surges in Value -- This One

"The relative value of cash will necessarily zoom higher when stocks plunge."

By Elliott Wave International

A negative sentiment toward cash had been in place for quite some time.
Let's go back a little more than a year when our Feb. 2019 Elliott Wave Theorist showed this chart and said:

The average cash holding in mutual funds just fell to an all-time low. All long term sentiment indicators look like [this], except for the ones that look even worse.

These headlines published later in 2019:

• Why you shouldn't go to cash now -- in one chart (Aug. 6, CNBC)
• 3 reasons to stay in a volatile market and not cash out (Aug. 8, Yahoo Finance)

These dismissive views toward cash are what to expect after a historically long uptrend in stocks. Many investors expected equity prices to keep climbing, so why hold cash?
Indeed, as recently as January, one highly prominent professional investor reverted back to the old saying, "Cash is trash."
However, in the same month, our Elliott Wave Financial Forecast said:

Cash is the only answer to survival in the coming environment.

The just-published April Elliott Wave Financial Forecast followed up with this chart and said:

Equities are the opposite of cash; risk-assets that require the surrender of cash. The relative value of cash will necessarily zoom higher when stocks plunge. The chart inverts the Dow's recent plunge to show the liftoff for a new bull market in cash. ... As [the book] Conquer the Crash stated: "When the stock market reaches bottom, you can buy incredibly cheap shares that almost no one else can afford because they lost it all when their stocks collapsed."

Speaking of a stock market bottom, are we almost there?
Well, as recently as March 28 (Marketwatch), a major financial website sported this sub-headline:

Coronavirus crash is a buying opportunity for focused, long-term investors

As the April Elliott Wave Financial Forecast relatedly noted:

The evidence of an entrenched and even surging public infatuation with shares is not simply anecdotal. A Bankrate survey of about 2500 U.S. consumers from March 20 through March 24 found that just 11% have taken investments out of the marker in first quarter of 2020, while 13% "added more investments over the last three months." Another 66% of respondents said "they intentionally left their holdings as is." Ten percent said "they were unaware of the current economic volatility." So, buyers or holders of equities accounted for almost 90% of investors through the worst first quarter in the 124-year history of the Dow Jones Industrial Average. Remarkably, 47% said they cut spending over "concerns of the economy." Just 15% said they did so because of "concerns over the stock market."

However, Elliott wave analysis of the stock market's price pattern suggests that many investors will soon wish they had embraced cash instead of stocks.
Now is the time to learn all you can about the Elliott wave model so you can apply this knowledge to the current stock market picture and gain insights into what to expect next.
A great educational resource is the online version of the book, Elliott Wave Principle: Key to Market Behavior by Frost & Prechter, which you can access free when you join Club EWI. Membership in Club EWI is also 100% free.
Get started.

This article was syndicated by Elliott Wave International and was originally published under the headline In Every Bear Market, One Asset Always Surges in Value -- This One. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Europe's Best-Performing 2019 Market: a Harsh Lesson in Complacency

Even a quick look at a chart's Elliott waves "usually pays off in spades"

By Elliott Wave International

In the world of investing, "complacency" is a potentially hazardous state of mind.
Consider that every year, September and October have often been rough on investors. But, in 2019, the S&P 500 had gained approximately 2% during each of those months.
Investors were comfortable with owning shares. Too comfortable.
That's why in November 2019, the Elliott Wave Theorist discussed the U.S. stock market and said:

Complacency is widespread now.

Yes, that complacency actually extended well beyond the borders of the U.S.
Indeed, in 2019, investors were even pouring into some of the past decades worst-performing markets. As examples: Moscow's main stock index spiked 29% and Italy's MIB index rose 28%.
Even Greece, a nation that brings to mind headlines of financial woes, had its equity market as Europe's top performer in 2019.
In fact, our January Global Market Perspective zeroed in on Greece specifically and showed this chart as an example of extreme complacency:

That complacency indeed marked a top in Greece's ASE Index. Here's an updated chart from our March Global Market Perspective, along with the commentary:

After prices briefly rose above the diagonal lines in a pattern that R.N. Elliott referred to as a "throwover," the Athens Composite reversed course and plummeted 21%. Investors punished all stock markets in February, but they positively brutalized the markets they still perceive to be riskiest. As we have said before, it's never wise to blindly jump into a market no matter how beaten down it has become. Likewise, even a quick consultation with the waves usually pays off in spades.

You see, in addition to the epic complacency, Elliott waves in the ASE Index also clearly indicated to our subscribers that a change in trend was at hand.
Now that a downturn has occurred in global equity markets, this is the time to learn about the Elliott wave method and get insights into how to apply it to your market analysis.
You can do so by reading the online version of Frost & Prechter's Wall Street classic book, Elliott Wave Principle: Key to Market Behavior. Access is 100% free when you become a member of Club EWI. Membership is also free.
Get started.

This article was syndicated by Elliott Wave International and was originally published under the headline Europe's Best-Performing 2019 Market: a Harsh Lesson in Complacency. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Crude Oil's 2020 Crash: See What Helped (Some) Traders Pivot Just in Time

The coronavirus wasn't the cause of oil's 70% collapse. This was

By Elliott Wave International

Let's start by establishing that the stock market is not driven by the news. Aggregate stock prices are driven by waves of optimism and pessimism -- which go from one extreme to another -- as reflected by the Elliott wave model. That's what makes the stock market predictable.
Hence, Elliott wave analysis is at the core of EWI's stock market forecasts.
Having said that, sentiment indicators are also valuable in providing clues about "what's next."
For example, Robert Prechter's book, Prechter's Perspective, made this observation:

No crowd buys stocks of other countries intelligently. For decades, heavy foreign buying in the U.S. stock market has served as an excellent indicator of major tops.

Since the start of 2020, crude oil has gone from "black gold" to "black days," plummeting 70% for its "worst quarter on record" (March 30, Bloomberg).
As of March 30, oil prices circled the drain of a two-DECADE low near $20 per barrel.
Is there any way an oil trader or active oil investor could look at the market's crash and NOT see what one March 12 CNN article coined "a nightmare scenario"?
That depends on one simple factor; i.e. did that trader/investor's methodology enable him/her to pivot in time to anticipate oil's downturn before it went from blip to "bloodbath" (March 10, Fortune)?
In his timeless Trader’s Classroom eBook "14 Critical Lessons Every Trader Should Know," Elliott Wave International's senior instructor Jeffrey Kennedy asserts that the #1 "fatal flaw" for any trader is a "lack of methodology." Writes Jeffrey:

"If you aim to be a consistently successful trader, then you must have a defined trading methodology, which is simply a clear and concise way of looking at markets.

"If you don't have a defined trading methodology, then you don't have a way to know what constitutes a buy or sell signal.

"Moreover, you can't even consistently correctly identify the trend."

So, it's not just about having a methodology. It's about having the right methodology.
In the case of crude oil, many oil participants rely on the mainstream methodology known as fundamental analysis. It says market trends are driven by external events related to that market. As of March 30, the event responsible for crude's 2020 crash is the coronavirus, and the substantial contraction in fuel demand that has resulted from the ongoing, virus-driven travel bans.
Said one March 30 BBC:

"Coronavirus: Oil price collapses to lowest level for 18 years... The price of oil has sunk to levels not seen since 2002 as demand for crude collapses amid the coronavirus pandemic."

That is now, March 30, 70% down and three months into crude's crash.
But what about then, in early January, when oil prices orbited an 8-month high near $70 per barrel?
The coronavirus was barely a dot on crude oil's radar, having taken just two lives and sickened 45 all overseas. As one health expert predicted in a January 17 New York Times:

"There will probably be cases in the United States at some point, but we believe the current risk from the virus to the general public is low."

COVID-19 wasn't the bearish news event oil experts were watching; the bullish escalating tensions in the Middle East -- set off by the January 3 US drone attack which killed the "second most powerful man in Iran" General Qassem Soleimani -- were. A series of retaliations by Iran followed, culminating in Iran's threat to block exports of oil through the vital gateway the Strait of Hormuz. Wrote one January 8 CNBC:

"Oil prices will climb above $100 a barrel if Iran blocks the Strait of Hormuz."

Added another news source: "An extended period of conflict in the region will support prices by fueling uncertainty, even as alternative suppliers step up." (Oil and Gas Journal)
Yet -- instead of the ongoing conflict supporting prices, oil turned down on January 6 and didn't look back. The fundamental methodology failed to prepare traders, either for the direction or the depth of that turn.
The methodology known as the Wave Principle did both.

Meet the Elliott Wave Principle, Esquire

In his Trader's Classroom eBook "14 Critical Lessons Every Trader Should Know," Jeffrey half-jokes that the best trading methodologies are so simple, they can "fit on the back of a business card."
And in his January 17 Commodity Junctures Service, Jeffrey used the tools and rules of the Wave Principle to identify an alternate bearish wave count for crude oil that called for prices to be slashed in half from current levels. In Jeffrey's words:
"The big narrative when you start looking at the weekly and monthly crude oil charts is -- any strength we see is going to fail."
The basis of Jeffrey's bearish analysis was the possibility that wave 2 was over, setting the stage for a third wave decline. Pictured below: Jeffrey's January 17 Commodity Juncture Service chart of crude oil followed by an idealized diagram of an Elliott third wave.

Note the timing of Jeffrey's January 17 bearish oil forecast. It occurred before the very first coronavirus travel restrictions were enforced on January 23, and before the OPEC+ "price war" began on March 6.
Soon after, on February 7, Jeffrey's near-term sister service Daily Commodity Junctures confirmed that oil's trend was now down and said,

"It's basically telling us that the high of the year is in place in crude oil and we will fall to $33 a barrel -- at minimum."

The next chart captures the action: Oil prices took the downside in earnest, plunging below $33 per barrel as anticipated by Jeffrey's January 17 bearish wave count.

The crude oil crash is just one real-world example of the danger of not having a methodology that leads trend changes, rather than follows them.
In his Trader's Classroom eBook "14 Critical Lessons Every Trader Should Know," Jeffrey expounds on all 5 "fatal flaws" of trading and offers original charts and lessons that stand the test of time.
In Jeffrey's words:

"Trading successfully is not easy. It's hard work...damn hard. And if anyone leads you to believe otherwise, run the other way, and fast.

"But this hard work can be rewarding, above-average gains are possible and the sense of satisfaction one feels after a few nice trades is absolutely priceless."

Get instant access to the complete, 45-page eBook today by joining the rapidly growing Club EWI community -- absolutely FREE. Get started now!

Stocks: When Grass Looks Greener on the Other Side of the ... Pond

By Elliott Wave International

Let's start by establishing that the stock market is not driven by the news. Aggregate stock prices are driven by waves of optimism and pessimism -- which go from one extreme to another -- as reflected by the Elliott wave model. That's what makes the stock market predictable.
Hence, Elliott wave analysis is at the core of EWI's stock market forecasts.
Having said that, sentiment indicators are also valuable in providing clues about "what's next."
For example, Robert Prechter's book, Prechter's Perspective, made this observation:

No crowd buys stocks of other countries intelligently. For decades, heavy foreign buying in the U.S. stock market has served as an excellent indicator of major tops.

Well, in the year 2000, that's exactly what happened. Foreign purchases of U.S. shares spiked to a then record $402 billion in March 2000. The spike in foreign buying coincided precisely with a price peak in the S&P 500. From the month of the high in March 2000 through October 2002, the S&P declined 51%.
Fast forward to December 2019, when our Elliott Wave Financial Forecast showed two charts related to overseas buying of U.S. shares. Here's the first one:

This chart notes our discussion about foreign buying in the year 2000 and also in August 2007: "The first five months of [2007] produced what was easily the biggest gusher of net foreign buying in history. The record suggests that falling prices lie directly ahead for the U.S. market."

The historic stock market top of 2007 occurred just two months later.
Here's the second chart from the December 2019 Elliott Wave Financial Forecast, along with the commentary:

The chart of foreign holdings of U.S. stocks shows a new record of $7.7 trillion in total stock holdings as of July [2019]. On November 7, The Wall Street Journal reported that the "appetite for U.S. shares among international clients has shown few signs of abating." Foreigners are all in on the U.S. stock market rally. Our bet is that it will end in a major top just as it did in 2000 and 2007.

Plus, the Elliott wave model was also indicating that the stock market top was approaching. The Jan. 2020 Elliott Wave Financial Forecast noted:

The rally is the final [wave] of the bull market.

The February 2020 stock market top occurred just a month later.
As you know, historic stock market volatility has unfolded since then. Interestingly, during highly emotional markets -- such as what investors face now -- Elliott waves tend to be clear.
So, now is the ideal time to learn all you can about the Elliott wave method of analyzing and forecasting financial markets.
You can do so free!
You see, when you signup for a free Club EWI membership, you get instant, free access to the online version of the book, Elliott Wave Principle: Key to Market Behavior, by Frost & Prechter. You can have this Wall Street classic on your computer screen in just moments!