Feeling The Effects Of Falling Crude Oil Prices: Are The Boom Times Over?
The Economic Crisis No One Saw Coming: A Convenient Untruth
The single most convenient untruth about the 2008 (and counting) financial crisis is that is was unforeseen. For two years policymakers have insisted "There was no way to know ahead of time" that the liquidity boom would come to a screeching halt. Yet even as the mainstream authorities failed to detect the economic earthquake moving below their own feet, somebody did "notice" well in advance. That person was EWI's Bob Prechter.
Will the United States Keep Its Triple-A Credit Rating?
Obviously the federal government can use its power to tax to collect more money. But rising unemployment and falling consumption already mean less revenue for Uncle Sam. At the same time, debt is piling up...
How a Rational and Sensible Human Being Becomes a Blockhead
If you have decided to delve into Elliott wave analysis and the Wave Principle, a great place to start is to learn why financial markets are patterned. This article explains why.
"Panic Phase: 2007-20??"
Have we started a "second leg down," which will be worse than the 2007-2009 crash? Could it be like (or worse than) the market of the early 1930s? The answer depends on investor psychology -- specifically, how long investors were in an "exuberant" phase before the trend changed from "bull" to "bear"...
The 'D' Word: Let's Talk About Deflation
The "D" word is in the air. Now that people are beginning to talk more openly about deflation, let's find out why it's a concern.
Cotton: The Touch, The Feel Of Elliott Wave Analysis In Action
Question: What's the difference between Elliott wave analysis and other methods of technical analysis of the financial markets? Answer: While most other methods are only good at identifying the direction of the current trend -- which is nothing to sneeze at! -- Elliott wave analysis ALSO helps you determine where that trend may end, when a tradable turning point could arrive, what the critical support and resistance levels are, and at what point will prices confirm or negate the analyst's forecast, i.e. letting him/her know whether she's on the right track or whether it's time to reevaluate.
Stock Market Insight: "Will The Selloff Mark Something Larger?"
EWI's Chief Market Analyst Steve Hochberg says the market has been in an "upward correction" since the July 1-2 lows. He's mainly looking at two very near-term alternatives. The price targets Steve mentions could have you sit up in your chair at full attention...
Social Mood – The Invisible Hand Behind Economics 101
Once you accept that social mood is the invisible hand behind economics 101, the cause-effect dynamic playing out before you becomes that much clearer.
Deflation: The Black Swan Has Been Spotted
Up until recently, the mainstream experts put the likelihood of deflation transpiring in the United States at whatever the current odds are of Mel Gibson finding a date; i.e. nill to none. Their catchphrase for the rare and unexpected nature of a deflationary event was "Black Swan." And as the following news items from 2008-2010 show, very few imagined this "bird" migrating onto the economic shore...
The "Early Bird" Conquers the Crash
When you act before a big storm arrives, you'll be prepared -- no last-minute scurrying as it hits. This applies equally to a financial "storm"...
"$100,000 A Year for Part-Time Work"
People tend to get agitated when they learn that some part-time city employees are earning $100,000 a year. Yes, it's another "can you believe this?" financial story of a California town...
How to Use Technical Indicators to Complement Elliott Wave Analysis
The MSCI Asia Apex Index combines 50 of the largest stocks in Hong Kong, Taiwan and Korea. The following Elliott wave development in the index provided Elliott Wave International's Asian-Pacific Short Term Update Editor Chris Carolan an opportunity to show his readers how he uses three of his favorite technical indicators to anticipate trend changes.
Clearing The Commodity Debate: One Market At A Time
These days, the mainstream commodity experts are more divided than the Team Edward versus Team Jacob "Twilight" fan base. One recent news item represents the optimists and reads, "Commodity boom will continue. These crucial goods are a safe haven in turbulent times." While another one right below it speaks for the bears: "Global Commodities Teeter On the Brink of Price Relapse." Then, there's the independent third party: EWI's chief commodity analyst and long-time Futures Junctures Service editor Jeffrey Kennedy.
Financial Markets: Inefficient, Patterned, Predictable
The Elliott Wave Principle's main claim -- and the hardest one to swallow -- is that mass investor behavior is not random, but patterned. And since it's patterned, it is also predictable. This assertion goes against most economic theories, which claim precisely the opposite: that markets are random and unpredictable. The dominant theory among these is the Efficient Market Hypothesis...
This assertion goes against most economic theories, which claim precisely the opposite: that markets are random and unpredictable. The dominant theory among these is the Efficient Market Hypothesis.
Market Insight: EUR/USD At $1.30, Again
After making little net progress last week, the EUR/USD (euro-dollar exchange rate and the most actively traded forex pair) broke just above $1.30 level (July 26). In technical analysis, a "round number" like $1.30 often marks a point of strong support or resistance (the latter, in this case). Prices can bounce around for a while, making several attempts to break it. And sometimes, when the level finally gives, prices rush past it with vigor. ...
Market Insight: "8-9 Day Turning Pattern"
Let's dig a little deeper into an Elliott wave pattern which goes back until at least mid-May...
FREE Insight Into Crude Oil's Next Big Move
If "fundamentals" drive trend changes in financial markets, then shouldn't the same factors have consistent effects on prices? For example: Positive economic data should ignite a rally, while negative news should initiate decline. In the real world, though, this is hardly the case. Just read these four oil price headlines from July 22 and 23. (And get FREE access to EWI's latest energy market forecasts!)
Market Insight: "Blue-Chip Indexes Should Be Very Close to Starting the Next Phase"
If you're a near-term trader, this type of market action is like an invitation on a hot summer day that says, "Come on in, the water is fine." Should you take the plunge?...
Hot Cocoa: Drink Now, Sink Later?
On July 16, 2010 one commodity veteran purchased 241,000 tonnes of cocoa beans on the London International Financial Futures Options Exchange (Liffe). This was the single largest cocoa purchase in Europe in 14 years: the price of London cocoa rose to its highest level since 1977.
From High-End to Thrifty: What Changes in Fashion Mean for China's and Japan's Economies
Only a small portion of the East China Sea separates China from Japan, but the two nations' cultures couldn't be more different. One of Elliott Wave International's Asian analysts recently experienced the cultural differences firsthand and noted how they speak volumes about the overall trend of the economy...
Stress Test: How to Find the Safest Banks in the U.S. and Abroad
Banks of all sizes are riskier than they used to be (think about portfolios stuffed with derivatives, emerging market debt and non-performing commercial loans), so it makes good sense to have your own personal stress test to find out which you can trust. This special report gives you what you need to know -- plus a list of the Top 100 Safest Banks in the U.S.
The Temptation to Buy Stocks Grows Strong When Bear Market Rallies End
. . .several rally sessions near the end of a bear market rally can potentially "hook ya" and then "cook ya.". . .
How To Use Bar Patterns To Spot Trade Setups
The first step in learning technical analysis of financial markets it to accept that markets are patterned. The second step is being able to recognize those patterns and use them to your advantage. To help you with the latter, we've put together a special free Club EWI resource, "How To Use Bar Patterns To Spot Trade Setups." Enjoy this excerpt.
Market Insight: Stock Market Sentiment in a Transformative Stage
With the DJIA bumping around the 10,000 mark, the July 19th issue of Elliott Wave International's Monday-Wednesday Friday Short Term Update takes a look at market sentiment...
Muni Bond Crisis: Don't Worry, Uncle Sam Will Save Us; Or Will He?
Over the past six months, the municipal bond market has melted like a snow cone in the Sahara desert. According to recent data, 35 muni bond issues totaling $1.5 billion have defaulted since January 2010, three times the average annualized rate going back to 1983. Still, as bad as things get in Muniland, the mainstream demand for tax-exempt general obligations has held firm.
Forget the "Wall of Worry." How About "Terrain of Terror"?
But at what point does the Slope of Hope level off -- and leave you facing the Terrain of Terror?. . .
EUR/USD: What "Fundamentals" Don't Tell You About
A month-and-a-half ago, the euro's "fundamentals" were very shaky. Mainstream forex observers took that as a sign of further weakness for the euro -- and many have missed the June 7 bottom. Now that Europe's "fundamentals" have improved (somewhat), many of the same voices are again relying on the current economic picture to forecast the euro's trend (bullish, this time). Do you think they may be looking at the wrong indicators?
Right Time for "Reefer"? Take a Toke of This
Because the market's trend is bearish now, the changing "public mind" toward legal pot is no surprise -- a modern day "prohibition repeal" of marijuana, if you will. . .
How The Wave Principle Can Improve Your Trading: See Charts
One of the most popular questions we field from newcomers to our site is this: "I respect the Wave Principle in THEORY -- but does it have the PRACTICAL rules and guidelines to make it feasible for real-time trading?" The short answer: Heck Yes! For a more in-depth explanation, the latest free resource from our Club EWI has the ultimate commentary: A SIX-page report by EWI's senior commodity analyst Jeffrey Kennedy titled "How The Wave Principle Can Improve Your Trading."
Tea Party: Why NOW?
The Tea Party has gathered enough momentum to become a political force. According to an April Gallup Poll, "28% of U.S. adults call themselves supporters of the Tea Party." But set aside your personal opinions for a moment, and please read the quotes below. They are from Robert Prechter's October 2003 Elliott Wave Theorist.
Spain's Stock Market: Seeing La Roja
In case you didn't hear the blaring vuvuzela of victory, Spain just became the new champions of the 2010 World Cup of Soccer. As far as the world cup of STOCK-er goes, however, Spain is not taking home any winning titles just yet. From its January 2010 peak, Spain's main IBEX index plummeted more than 30% to its lowest level in over a year before reclaiming the upside in mid-June.
To "Predict the Present" Is NOT A Forecast
Examples of this stand out in virtually every field, from the financial markets to baseball. Consider this answer to an interviewer's questions from Prechter's Perspective:
Take it from the (Double) Top in European Markets
EWI's European analyst, Brian Whitmer, was recently featured in Bilanz, the largest Swiss business magazine. You have to be able to read German to get the gist of what Whitmer said to Bilanz, but he also wrote about the same topics in the July issue of The European Financial Forecast. Two bits of technical analysis reveal important insights to European markets now.
Tomorrow's Financial Headlines -- Today?
If rates fall, that's good for stocks. If rates rise, that's bad for stocks. Yet numerous studies have proven that stock prices follow no such dictate consistently. How about the market's "fundamentals"? Do they drive stock prices?. . .
Corn: Cropportunity Awaits
When an analyst relies on news and events OUTSIDE the market to determine a trend, it goes a little something like this. First, he/she is forced to wait for the news item to run its course. Once that happens, then you judge by the market's reaction in the wake of said news how prices will progress from there.
"Kill Switch Engage"?
The "kill switch" bill includes 197 pages of mind-numbing detail, written in language that seems deliberately indecipherable. Of course, the relevant detail here is the one which bestows the President with the authority to pull the plug on the Internet during a cyber-attack -- or even during the threat of one...
Video (Forex): How to Combine Wave Analysis with Momentum Indicators
Every Friday EWI's Senior Currency Strategist Jim Martens records a market overview video for his subscribers, usually with lots of educational insights. In this classic free 5-minute video, you will see how to combine Elliott wave analysis with RSI and other momentum indicators.
Quadrillion Dollar Debt: "Day of Reckoning" Looms
A thousand trillion in debt can't be wished away or swept under the rug. No one can "forgive" the debt. The consequences of unwinding this debt could be as massive as the dollar figure itself...
The Myth of Earnings
As the new season for corporate earnings reports approaches, analysts start talking about the influence of earnings on the broad stock market. But here's a shocker: The idea of earnings driving the broad stock market is a myth. When making a claim like that, you'd better have proof...
From One Friend To Another: Silver Is NOT A Safe Haven
The truth is, there is no consistent relationship between precious metals and equities. In certain cycles, the two oppose each other. In others, they mix. History shows only ONE kind of economic environment in which their movements are correlated: When an all-time high in optimism fuels a credit expansion so powerful as to send every market higher, and one whose reversal brings all disparate markets tumbling as one.
A Perfect Example of the Slope of Hope
What's the opposite of climbing the "wall of worry"? Now is a good time to learn why it's called the slope of hope.
(Video) Germany's DAX: "Bullish Possibility Has Faded"
After spiking to 6359 on June 21, Germany's DAX, the European Union's benchmark stock index, has fallen to as low as 5826 -- an 8% loss. Was there anything that could have warned European investors of the decline? Tom Denham, editor of Elliott Wave International's Stocks Specialty Service, explained why the DAX turned bearish in this June 24 video.
EUR/USD: Below $1.19
On June 6, the EUR/USD fell as low as $1.1876, yet another 4-year low. Elliott wave patterns have again warned of that euro weakness. Take a look at this June 4 chart and forecast.