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In late 2021, Elliott Wave International Founder and President Robert Prechter gave a rare, live presentation — “A Stock Market Top for the Ages” — at the annual New Orleans Investment Conference. The recording comprises Prechter’s December 2021 Elliott Wave Theorist.
And now our friends at EWI are sharing it with you free ($99 value).
In just 20 minutes, Prechter shows 28 charts — everything from penny stocks to dollar volume in IPOs to SPACs — to give you a clear, bird’s-eye view of today’s markets.
“Unbelievable” is the word he uses to describe several of these charts.
This video sells for $99 in EWI’s Store. You get it FREE with this coupon code: STOCKTOP. You need to simply enter the code once you click on the link below and join free Club EWI to watch.
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You are probably familiar with the classic “head and shoulders” chart pattern.
But, in case you need a refresher, here’s a brief description of a head and shoulders top:
The high of an initial upward move is the left shoulder. After a decline, another upward move takes prices to a higher high, or the head. A second decline follows the head. A third rally then takes prices to a peak below the high of the head, and becomes the right shoulder. The left and right shoulders are often similar in duration and extent. A trendline connecting the two lows is called the neckline. When prices penetrate the neckline, a change of trend is believed to have occurred.
Head and shoulders bottoms also occur and the same description applies except in reverse.
This head and shoulders measuring formula — showing a top as an example — provides even more insight. The commentary is from a past issue of Elliott Wave International’s Trader’s Classroom:
To identify a high-probability price target for the move following the break of the Neckline, measure the distance between the Head and the Neckline and then project that distance down from the point at which the Right Shoulder breaks the Neckline.
The July 2021 Global Market Perspective, a monthly publication which provides coverage of major global financial markets, applied this knowledge to a forecast for the euro.
The chart on the left is from that July issue of the Global Market Perspective and the chart on the right was updated for the December Global Market Perspective. Here’s what the December Global Market Perspective said:
A relentless four-month decline pulled the euro slightly below our downside target of $1.1263 on November 19, as these before-and-after charts show. On November 24, the euro bounced from its $1.1185 low. …
You can learn about other classic chart patterns by reading Frost & Prechter’s Elliott Wave Principle: Key to Market Behavior. Here’s a quote from the book:
The Elliott Wave Principle not only supports the validity of chart analysis, but it can help the technician decide which formations are most likely of real significance.
Get the details of how the Wave Principle “supports the validity of chart analysis” by reading the entire Wall Street classic for free!
That’s right — you can get unlimited and free access to the online version of Elliott Wave Principle: Key to Market Behavior by simply joining Club EWI — the world’s largest Elliott wave educational community.
Don’t worry — Club EWI members are not under any obligations — yet, members do enjoy free access to a wealth of Elliott wave resources on investing and trading.
Current resources available to Club EWI members include the report, “Crypto Trading Guide: 5 Simple Strategies” and the new video offering “Apply This Technique to Stop Rushing into Trades.”
Plus, as mentioned, free access to Elliott Wave Principle: Key to Market Behavior (just click on the highlighted link to have this Wall Street classic on your computer screen in moments).
This article was syndicated by Elliott Wave International and was originally published under the headline Euro: Look at This Head & Shoulders Chart Formation. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
Waves of social mood fluctuate in accordance with the Wave Principle and determine prices in financial markets.
Moreover, these same waves regulate the tenor and character of social attitudes and actions.
The key point is that social mood is the cause. It is endogenous. Prices in financial markets and events in society are the effects. They are exogenous.
However, most people believe the opposite is true.
For example: Most people believe that recessions cause business people to be more cautious. However, Elliott Wave International posits that cautious business people cause recessions.
Or, consider the widespread notion that scandals make people outraged. In truth, outraged people seek out scandal. Consider that when mood is positive, fodder for scandal is often dismissed.
You can also flip around the notion that nuclear bomb testing makes people nervous and say that nervous people test nuclear bombs.
Here’s another example: Many observers believe that a rising stock market makes investors increasingly optimistic. However, the evidence suggests that optimistic investors cause stock market prices to rise (and pessimistic investors cause market prices to fall).
Elliott Wave International’s Asian-Pacific analyst, Mark Galasiewski, drove the point home further when he said this at the Chartered Market Technician Association’s Asia-Pacific Summit in October:
If you were able to make that one counterintuitive leap that the same endogenous mass psychological swings that create patterns in the stock market also drive other headline social events, then you have already won half the battle in the market and you understand stock market movements better than 99% of industry professionals.
Social mood swings from extreme optimism to extreme pessimism and back again.
By the time that these social mood trends show up as major news or events (positive or negative), that’s when the pendulum is set to start swinging in the other direction.
Recessions, scandals, nuclear testing and so on were mentioned as examples of what may occur during negative mood trends.
Let’s add epidemics to that list. Yes, Elliott Wave International has observed a relationship between bear markets and infectious disease.
Using this knowledge, the April 3, 2020 Global Market Perspective, a monthly Elliott Wave International publication which covers 50+ worldwide financial markets, said:
Asian-Pacific and emerging market stocks began bull markets amid the SARS epidemic of 2003 and the Swine Flu epidemic of 2009. They should similarly embark on a bull market amid the Covid-19 pandemic of 2020.
Indeed, look at this MSCI Emerging Markets Index chart which Mark Galasiewski showed at that Asia-Pacific Summit previously mentioned:
As you can see, an uptrend did ensue amid Covid-19.
However, it would be wrong to say that epidemics are bullish for the stock market. That’s that “exogenous” thinking trap which was discussed above. A proper way to think about it is that when social mood is at its lowest, epidemics are more likely. That’s why they have so often marked a bottom, not a top. As Mark said:
Notice that these three major infectious diseases spread widely toward the end of major bear markets.
This is invaluable information for any investor. Imagine having this knowledge back in March 2020, when the first wave of the pandemic hit and everyone panicked!
If you would like to dig deeper into the “endogenous patterns” of the Wave Principle, you are encouraged to read the Wall Street classic, Elliott Wave Principle: Key to Market Behavior, by Frost & Prechter.
Here’s a quote from the book:
The Wave Principle is governed by man’s social nature, and since he has such a nature, its expression generates forms. As the forms are repetitive, they have predictive value.
Get insights into the “predictive value” of the Wave Principle by reading the online version of the book — entirely free!
The only requirement for free access is a Club EWI membership. Club EWI is the world’s largest Elliott wave educational community and is free to join. Members are under no obligations. Yet, members do enjoy complimentary access to a wealth of Elliott wave resources on financial markets, investing and trading.
Follow this link for free and unlimited access to the book: Elliott Wave Principle: Key to Market Behavior.
This article was syndicated by Elliott Wave International and was originally published under the headline How to Outwit 99% of Investment Pros. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
The following was excerpted from Elliott Wave International’s July Global Market Perspective — published July 2, 2021.
The above chart is updated from March. It plots weekly spot gold prices and Small Traders’ net position in gold futures as a percentage of open interest from 2017. Small Traders are investors who buy and sell futures contracts in a small-enough size to exempt them from SEC reporting requirements. They are considered retail traders. Historically, they are trend-followers, increasing their net-long position as prices rise and vice versa. When they deviate from this norm, it is often a meaningful signal of a coming trend change, though it is not a short-term timing tool. Observe how elevated Small Trader buying has become since gold’s top at $2072.12 on August 7, 2020. Prices are down 15% from the high eleven months ago, but Small Traders hold their largest net-long position in eight years. Small Traders aggressively bought the mid-month price dive in June when gold declined 8% over 13 days. Gold’s decline from August 7, 2020 to March 8, 2021 is not a clear impulse pattern, but the decline from the June 1 high is. The abnormal activity of Small Traders who are buying gold’s “dip” suggests that the bearish case is intact, and the five waves down from June 1 are compatible with this view.
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The stock market is a fractal — i.e., a self-repeating form at all degrees of trend. Meaning, without the time or price labels, you can’t tell if you’re looking at a 2-minute chart or at a monthly one.
What’s more, stock market trends unfold in repetitive and recognizable price patterns.
What’s more, these patterns — Elliott wave pattens — emerge regardless of the news.
Yes, there may be very brief reactions to news, but then the main trend continues. That’s because the larger stock market trends aren’t driven by the news, they are driven by market participants’ bias, bullish or bearish. What we call, market psychology.
That’s why you often see headlines with the word “despite” in them — like, “Stocks rally despite U.S. unemployment at the highest level since the Great Depression,” or “Stocks fall despite stronger-than-expected consumer confidence report.” That word, “despite,” tells you everything you need to know.
Review Part I and Figures 1 through 5 in Chapter 12 of Robert Prechter’s 2017 book, The Socionomic Theory of Finance, and you’ll see evidence that the market is not priced according to external conditions.
And, here’s what the book says about those brief reactions:
Evidence for even temporary emotional reactions in markets is surprisingly suspect. All market observers have seen futures prices gyrate more intensely for a few seconds or minutes before and/or after an announcement perceived as major news. However, ensuing market movement may be totally opposite to the tenor of such news, even when it is a total surprise.
This quote came to mind when, on June 29, this sobering news appeared on a major financial website (CNBC):
Nearly half the U.S. population is without a job, showing how far the labor recovery has to go
The employment-population ratio — the number of employed people as a percentage of the U.S. adult population — plunged to 52.8% in May, meaning 47.2% of Americans are jobless.
Interestingly, on that very day, the DJIA closed up 580 points.
Plus, as you know, the stock market has bounced back substantially since the March lows, despite a historic slew of negative news.
Indeed, the June Elliott Wave Theorist, a monthly publication which has offered subscribers analysis of financial markets and cultural trends since 1979, showed this chart and said:
The first reports of economic contraction came out in March and continued through May. … Stock prices not only rose for seven weeks but also jumped higher on nearly every report of a rise in unemployment claims. A particularly big up day occurred when statistics suggested an increase in employment, but analysts quickly recognized that the numbers were untrustworthy due to restrictions in data collection deriving from the pandemic. No matter; stocks went up the next day, too.
In fact, you can also see that the stock market rose more than it fell when Covid-19 dominated the headlines! It also rose on the day of the first protests — and continued to climb for two weeks, despite the vandalism, looting and clashes between protestors and police not seen in decades.
The real driver of the stock market’s trend is investor psychology, which Elliott waves reflect.
As the book, Elliott Wave Principle: Key to Market Behavior, notes:
The Wave Principle is governed by man’s social nature, and since he has such a nature, its expression generates forms. As the forms are repetitive, they have predictive value.
Sometimes the market appears to reflect outside conditions and events, but at other times it is entirely detached from what most people assume are causal conditions. The reason is that the market has a law of its own.
Learn about this “law” of the market.
You can do so by reading the online version of Elliott Wave Principle: Key to Market Behavior, which is available to you free when you join Club EWI. Membership is also free.
Club EWI is the world’s largest Elliott wave educational community and members get free access to a wealth of resources on investing and trading.
Click on this link to get started: Elliott Wave Principle: Key to Market Behavior — read it for free.
This article was syndicated by Elliott Wave International and was originally published under the headline Stock Market: “Relevant Waves Vs. Irrelevant News”. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
Hebben beurzen en/of de economie baat bij een bepaalde Amerikaanse president?
Bij iedere zittende president doet de pers alsof het zo is. Ooh wat is het beleid of de uitspraak van een president belangrijk. Het komt in iedere krant en de uitspraak had volgens de analisten direct gevolgen voor de koersen.
Dit is voor beleggers die interesse hebben in diepere analyses een prachtige kans! De Elliott Wave site in Amerika geeft een gratis week toegang weg.
Geef u hier gratis op en profiteer van deze prachtige kans: Klik hier
There are nearly 50 commodity markets traded all over the world at any given time. That’s one for every state in the United States.
Waarschijnlijk hoorde u al eens van de Elliott Wave technieken. Deze analyse methode is mogelijk de meest natuurlijke methode die er ooit ontdekt, danwel uitgevonden is.
Ze gaat namelijk uit van de basiselementen van waaruit in feite alles natuurlijk opgebouwd is.
