If You Want To Confirm Your Market Bias, Do NOT Read This Article

Monday, April 25, 2016

Why Do You Read Articles On Markets?

http://www.gold-eagle.com/sites/default/files/gleason080315-1.jpgHave you ever considered the purpose for which you read articles on the market?  Do you approach them with an open mind and look for objective perspectives to incorporate into your decision making?  Or, are you simply looking for something to confirm your own bias?

I have now been writing publically for almost 5 years and have learned that most of you come to read articles to confirm your bias.  Very few of you are looking for objective perspectives.  And, even less of you are interested in seriously contemplating a position opposite of your own, even if it has been correct more often than your own.  So, you may as well stop wasting your time, and move on right now.  There are tons of articles out there which will confirm your bearish bias.  This will not be one of them. This article will summarize the main causes for losses in your investment accounts; yet, most of you will disagree with the truth presented herein.

One Cannot Rely On Fundamentals

When I began writing publically on Seeking Alpha almost 5 years ago, I presented a market perspective regarding how fundamentals lag the market and cannot be relied upon to identify trend changes.  So, when I was calling for a major market top in metals in September of 2011, most did not take my warnings seriously, as the fundamentals were still quite strong.  Unfortunately, fundamentals are always strongest at the highs, and weakest at the lows in any market.  That is why they are completely unreliable for identifying a market turning point.

Yet, no matter how often I proved that fundamentals should not be followed and provided an alternative manner with which to view markets more reliably, many still fought the truth, no matter how many times it was proven to them.  This is simply the way the human mind seems to work.  However, there have been a minority of you that have opened your minds enough to be able to accept the truth, rather than fight it in order to maintain your prior biases (http://bullion.directory/fundamental-analysis-has-failed/).

Why Are You So Bearish?

For those of you that do not understand why you gravitate to the bearish side of the market, I have provided an explanation as to why many of you only focus on your natural bearish tendencies in an article that can be found at http://www.marketwatch.com/story/why-is-everyone-so-bearish-2016-01-10.

Think about it.  When you have perused the articles on this site over the last 2 months, did you not most appreciate those articles that supported your perspective that the stock market was going to imminently crash, similar to what we experienced in 2008?  I can tell you that the most bearish stock market articles often earned the most likes.  Sadly, those that followed them also earned the most losses.

Manipulation Theories Have Never Provided Profits

How many of you bought into the perspective that manipulation caused your losses in metals over the last 5 years?  I understand the extreme popularity of this perspective; yet, I have explained why the manipulation theory is akin to claiming a paper cut caused a person to bleed to death (http://www.gold-eagle.com/article/market-manipulation-and-dark-secret-finally-revealed).

But, I am quite certain many of you simply disregarded this perspective, as you need to believe that something, other than your lack of understanding of how markets work, caused the significant drawdowns in your accounts. And, yes, I know you still want to maintain the perspective that there is no such thing as a free market anymore.  So why do you have your money in the market at all?  Isn’t that the ultimate in hypocrisy?  But, let’s move away from the question, as that is not what so many of you want to hear.

Then there are those of you who believe that manipulation is what directs the market from a macro perspective, yet, you believe that you are smart enough to be able to trade the market anyway.  Now, I am sorry to interject reason into this perspective as well, but this is one of the most intellectually dishonest perspectives proffered.

The general manipulation theory posits that there is an entity which moves the market at its whim. This means that there is no way one can know which way the market will move, since that can only be known by the directors within that entity.  Therefore, there cannot be any methodology that could ever successfully divine the direction of the metals, at least not based upon this theory. 

Yet, there are actually people that make the dishonest and preposterous claim that they can trade manipulation.  In fact, I even read one analyst who claims that they only began trading profitably by guessing when the market would be manipulated.  By definition, this is a logical impossibility. 

In fact, anyone making such a claim is not only dishonest, but also quite dangerous, unless you are willing to accept they have some form of extra-sensory perception.  And, if you believe they have ESP, then how do you explain the last 10 guaranteed bottom calls they made over the last 2 years, each clearly turning out to be quite wrong?  Is this not simply the old “broken clock” syndrome? I mean, if you call enough guaranteed bottoms in the market, one will eventually be right.  Moreover, if you follow this perspective to its ultimate logical conclusion, you would understand that this nothing less than circular reasoning, as they are really saying that there is no manipulation, otherwise there is no way they would be able to identify it before it happens.

In the last 5 years, I have seen only one method that has been able to identify the twists and turns in this market in a reliable and consistent fashion, and that is following market sentiment.  Everything else has been proven wrong time and again.  And, while many have now been proclaiming that they caught the market bottom, they fail to tell you that this is likely the tenth time they have caught that bottom in the last year alone.

Ultimately, I can assure you that there is no account traded over the last 5 years that has been profitable by following theories of manipulation or by following fundamentals. So, don’t you think it is about time to focus on what does provide consistent profitability rather than consistent excuses?  Sure, a broken clock is right twice a day, but do you really think that is going to provide you with the consistent profitability you seek within these non-linear markets?

Again, most of you will not want to hear any of this, and will surely dismiss this as the rantings of a madman.  But, I can assure you that I have not come across anyone with a record that has exceeded ours in accuracy for directional moves in the metals over the last 5 years.   And, while many of you will likely dismiss our perspective because it does not comport with your bias, I can assure you that our ability to be highly accurate in the metals market has completely ignored all manipulation theories and fundamentals.  Again, ask yourself, from a logical perspective, how can any method be highly reliable and accurate in identifying the twists and turns in a market that is supposedly manipulated? 

When you begin to understand how to track market sentiment, while ignoring all the noise, then you will begin to understand the true power of the dark side of the market.  And, that has nothing to do with the evil banks.

Avi Gilburt

Avi Gilburt is a widely followed Elliott Wave technical analyst and author of ElliottWaveTrader.net (www.elliottwavetrader.net); a live Trading Room featuring his intraday market analysis (including S&P500, metals, oil, USD & VXX); interactive member-analyst forum; and detailed library of Elliott Wave education. Visit his website:https://www.elliottwavetrader.net. You can contact Avi at info@elliottwavetrader.net.