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Cheers for the 2021 Stock Market and These “Great Expectations”

Insights into “the most speculative of strategies … among the most speculative of traders”

by Bob Stokes
Updated: December 30, 2020

We're reminded during this time of year of the wonderful classic by Charles Dickens, "A Christmas Carol."

As you probably know, the Victorian-era British novelist also wrote several other books, including "Great Expectations."

That title is also a fitting description of the mindset of many stock market investors as they raise their glass to 2021: "Cheers to the market!"

One example of the positive expectations for the market is from a BMO Capital Markets' strategist (Yahoo News, Dec. 7):

"Expect another year of double-digit gains. We anticipate that 2021 has the potential to be one of the best years ever in terms of earnings growth."

Yet another is from a Goldman Sachs' strategist:

"We recommend overweights in Information Technology, Health Care, Industrials and Materials."

Several other professionals have expressed "great expectations" for stocks in 2021.

But novice speculators are also on board.

The December Elliott Wave Theorist showed this chart from SentimenTrader and said:

SmallTraderCallBuying

The chart shows that traders with only $9000 to their names are aggressive to a record degree.

The Theorist goes on to quote SentimenTrader:

"Among the smallest of traders, 54% of volume flowed into buying call options to open over the past week. That's a record amount of focus among the most speculative of strategies and among the most speculative of traders. The 5-year chart shows just how much this behavior has ticked up." -- SentimenTrader

Great expectations, indeed!

Yet, we urge you to think independently about financial markets as we enter 2021.

The reason will become crystal clear as you read our flagship investor package, The Financial Forecast Service.

Follow the link below to get started now.

Say "YES!" to Financial Safety -- and to Peace of Mind – in 2021

You can enjoy both by staying ahead of important turns in major financial markets.

The record shows that we alerted subscribers to expect the jump in stock market volatility shortly after the start of 2020 -- in plenty of time to properly position their portfolios.

Now, we bring you another financial message for the start of 2021 -- and it carries a high-degree of urgency (saying the message is merely "timely" would be an understatement).

Learn what you need to know by reading our flagship investor package: The Financial Forecast Service.

Your first step to "get up to speed" is to follow the link below.

The Myth of Shocks

Read Chapter 1 of Prechter's Socionomic Theory of Finance.

EXCLUSIVE

EuroSTOXX 50: One Way to Label This Chart You May Not Have Considered

An Elliott wave contracting triangle is a price pattern that often forms in a corrective wave 4 position -- meaning, a big move in wave 5 comes next. However, a variation of the triangle called a "running triangle" offers additional possibilities. Watch our European Short Term Update editor walk you through a chart of the pan-European index of 50 stocks and explain the implications.

EXCLUSIVE

Stocks and Skyscrapers Here We Go Again

We're not the first ones to notice a curious correlation between the timing of record highs in the stock market and proposals for building new skyscrapers. Watch our Financial Forecast co-editor discuss the latest proposal for an "upside-down" skyscraper in New York City.