Avi Gilburt On Bond Market Crash Signals; Does Market Get 1 More High?
Rena Sherbill: Avi Gilburt, welcome back to Investing Experts. Always great to talk to you on Seeking Alpha. Always great to get your insights. So thanks for joining us again.
Avi Gilburt: Thank you so much for having me.
RS: A pleasure. So we're here, December 5th, tail end of the year. What have you in mind when you're looking at the market? What are you -- how are you assessing what you're looking at?
AG: Well, I've been looking forward to, well, not really looking forward to it, but I've been looking at the start of a major bear market around this timeframe and we've been looking at that for -- we've been expecting this and looking towards this specific timeframe for about a decade now when I started telling my clients that, to be preparing for this.
And I have just one remaining question and that is, does the market get one more higher high over 4800 before that major bear market begins or has it already begun?
And oddly enough, I think the next few weeks probably will give us our answer. So that's really how I'm looking at it.
RS: And where is the answer coming from?
AG: Well, most specifically from the market structure. When the market was coming down into the 4100 region, I said, well from there I was expecting a rally back to about 4350 to as high as about 4475. And the market now has, you know, a little bit exceeded the expectations I had for that rally. The manner in which we decline from this rally will probably give me the answer.
Now first and foremost, 4607 - which was the high we struck in the summer - that is a very key point right now. If the market can now hold over the 4500 range and then rally over 4607.07 then it would invalidate any immediate bearish potential for me, or at least the setup I'm seeing right now.
If we can do that, then I'm expecting a corrective pullback which will be a buying opportunity. And then I'm looking for one final rally into 2024 that should take us north of 4800.
However, if we cannot exceed 4607.07 first and instead we break down below 4500 first, then the nature of that pullback will tell me whether or not we're going higher first or not. When I say the nature of the pullback I'm saying, if the market provides us with a corrective pullback back to about 4300 to about 4400 that would be a buying opportunity for a rally north of 4800.
If the market drops in, as we say, impulsive structure, meaning a five wave structure based upon the Elliott Wave structure, then it tells me we're probably setting up for what some may consider a near term market crash into 2024 which will be pointing us south of the levels we struck in October of 2021. So that's, it's a very important inflection point.