A Gold Market Analyst’s Confession

Elliot Wave Technical Analyst & author @ Elliott Wave Trader
July 20, 2015

Abraham Lincoln once said:

“You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.”

What honest Abe was saying is that one can hide the truth from the public for only so long. Ultimately, the truth will come out.

Until now, I have had to keep a very tight lid on this information. But, I always knew that it was only a matter of time before it finally became public. And, it seems that time is now. Yes, I am going to have to finally come clean with the “truth.”

After years of being on the correct side of the market in the metals, I have attempted to “hide” my accurate market calls behind some crazy, old, esoteric analysis methodology, which can be somewhat complex at times.  Many have questioned my methodology, and others have simply called me lucky.

Since many do not understand how the methodology works - mostly because they have not attempted to learn about it in detail – they have simply suggested that the methodology does not work.  Their claim is that no methodology can possibly provide the accuracy that we have shown over the last 4 years since calling the top in the metals. 

One commenter has noted the following about this analysis methodology:

 It appears that AVI GILBURT receives insider information that accurately predicts metals prices. It also appears that he then uses this knowledge to fabricate an aura of "Truth" around his fundamental analysis, as to why metals are trending the way they are.

His analysis always arrives at the conclusion that central banker coordinated price manipulation is impossible, despite that the central banks are the world's largest holders of metals and that they coordinate their activities via the BIS.  It appears that GILBURT is a paid-for change agent. Use him to predict metals prices, but ignore his analysis, which exists to brainwash you.

This past week, another commenter accused me of being “hard wired into the PTB (“powers that be”).

So, after years of writing articles attempting to keep investors on the correct side of the market, I have a confession to make.  Not only are these commenters right in their accusations of me being tied into the manipulation cartel . . .  I am going to come completely clean with the truth:  I AM ACTUALY THE LEADER OF THE CARTEL.  There, I finally admitted it.  Are you happy now?  In fact, Ben Bernanke worked with me to manipulate the gold market to top within 6 dollars of my PUBLISHED top target (he was not efficient enough to pull it down exactly at my target, so I had to strongly reprimanded him for his bumbling, and immediately began looking for his replacement).  His replacement (Janet) is now under my total control as well.  She has served me quite well of late in keeping the price down despite all the turmoil we have seen in the financial markets.   

Yes, folks, I am just kidding.

As human beings, our egos make us believe we are in control of the world around us. We like to believe that we can use reason to make wise and correct investment decisions. We like to make sense of everything we do. But, unfortunately, that is not the case when it comes to trading and investing in markets, especially precious metals.

I know it is hard to believe, but human decision making is often emotional and has a distinct general pattern, and is not as "reasonable" or as "logical" as many of you believe. And turns within these patterns are seen at various Fibonacci ratios. In fact, studies have been performed throughout the last 20 years which substantiate this perspective.

The problem shared by most investors and traders is that our human egos will not allow us to believe that there is a greater power that is engrained within the human brain that controls market movements, en masse. Humans are hard wired for herding in their basal ganglia and limbic system within their brain, which is a biological response they share with all animals.

In a paper entitled "Large Financial Crashes," published in 1997 in Physica A., a publication of the European Physical Society, the authors, within their conclusions, present a nice summation for the overall herding phenomena within financial markets:

Stock markets are fascinating structures with analogies to what is arguably the most complex dynamical system found in natural sciences, i.e., the human mind. Instead of the usual interpretation of the Efficient Market Hypothesis in which traders extract and incorporate consciously (by their action) all information contained in market prices, we propose that the market as a whole can exhibit an "emergent" behavior not shared by any of its constituents. In other words, we have in mind the process of the emergence of intelligent behavior at a macroscopic scale that individuals at the microscopic scales have no idea of. This process has been discussed in biology for instance in the animal populations such as ant colonies or in connection with the emergence of consciousness.

In fact, one commenter to one of my articles on Seeking Alpha made the following astute point regarding how news affects these subconscious herding trends:

Compare the market to a stream of ants marching by in, generally, a single direction. Run a stick across their path and there will be some momentary confusion and reaction to the direct stimuli but very soon afterwards the original parade of ants continues and the stimulus is forgotten.

Moreover, in a study performed by Dr. Joseph Ledoux, a psychologist at the Center for Neural Science at NYU, he noted that emotion and the reaction caused by such emotion occur independent and prior to, the ability of the brain to reason. And, yes, other studies have shown that this innate decision making revolves around Fibonacci ratios, which is also the basis for all of nature's laws.   

The analysis methodology I use attempts to track these movements and patterns, utilizing Fibonacci mathematics.  It has a proven track record. But, the catch is that one must apply this analysis methodology rigorously and without allowing subjective expectations to creep into your objective thought process.  It is for this reason I do not “buy-in” to fundamental arguments, nor do I even pay attention to them.  They have only hurt investors who have traded or invested based upon those “logical” arguments for the last 4 years.

But, again, I am sure many of you will dismiss this because it is not based upon your ability to control the markets or to identify the controlling piece of news. You still cling to the notion that "reason" dictates market movements, but cannot explain it when the markets move in the opposite manner in which such reason would dictate. You simply state that "the market is not trading upon fundamentals at this time."  But, the metals market has taken this one step further and simply claims the market must be manipulated. 

Based upon much research, it does seem that the market may be considered to be on a path that is determined by a mass form of herding that is given direction by social mood. It sure does explain the oft asked question of why markets go up when bad news is announced or vice versa. It also takes out all the guess work in attempting to determine the next "news event" that may move markets. And it also means that any attempted "manipulation" in the metals market does not really have the affect so many believe it does.

So, as I have been saying for quite some time in the metals market. . .prepare for lower lows.

Respectfully Submitted by:

The Evil Emperor of the Metals Cartel

Avi Gilburt is a widely followed Elliott Wave technical analyst and author of ElliottWaveTrader.net, a live Trading Room featuring his intraday market analysis (including emini S&P500, metals, oil, USD & VXX), interactive member-analyst forum, and detailed library of Elliott Wave education. You can contact Avi at: [email protected].


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