First, a couple of headlines:
MSCI World Index's Worst Monthly Slump On Record – Stocks fell in Europe and Asia, extending the MSCI World Index's worst monthly slump on record… The MSCI World of 23 developed countries has slumped 20 percent in October, headed for the worst month since records began in 1970… (Oct. 31, Bloomberg)
Corporate Credit Markets Suffer Worst Month on Record in Europe – Corporate debt markets in Europe endured their worst month on record as the credit crisis curbed bond sales, drove the cost of default protection to all-time highs and savaged loan prices. Investors are demanding the highest yields relative to government debt in a decade to buy corporate bonds. (Oct. 31, Bloomberg)
And now, here is the opening line of the new, November issue of Elliott Wave International's monthly European Financial Forecast (published Oct. 31):
"Most European stock indexes fell substantially farther in October 2008 than they had ever fallen in a single month before, including during the crashes of 2001, 1998 and 1987."
None of it sounds like good news. However, you may know that the Elliott Wave Principle is a contrarian investment method. Based on years of observing market behavior, we at EWI know that while the best news typically comes near market tops, the worst news appears – you guessed it, near bottoms.
Why? Because when everyone has invested their money in one particular market, its price cannot rise any more. Conversely, when there are no more sellers left, a price cannot fall much lower. This is a big reason why the November European Financial Forecast goes on to say,
"This historic performance suggests that the decline may be at least temporarily exhausted."
That's a bold statement to make in the current climate. But don't take our word for it – see the evidence first-hand in the just-published, November European Financial Forecast. You'll find EWI's latest analysis and forecasts for these markets:
- Germany's DAX stock index
- Britain's FTSE-100
- France's CAC40
- The Netherlands' AEX
- Switzerland's SMI
- Spain's IBEX 35
- Italy's MIB 30
- Dow Jones Euro Stoxx 50
- Russia's RTS
- Eastern Europe's CECE Overall Traded Index: Hungary, Poland, Czech and Slovakia.
- PLUS, a new socionomic study: "The New Global Bull Market in Socialism" by EWI's Alan Hall. Excerpt:
"Socialism is suddenly a hot topic. In Japan, young people are joining the Japanese Communist Party in 'droves.' In Russia, there is renewed reverence for Stalin. Latin American leftists are 'gloating over Comrade Bush’s Bailout,' which one paper described as 'the biggest socialist act since the New Deal.' In the U.S. presidential campaign, John McCain has seized upon Barack Obama’s comment about 'spreading the wealth' as reminiscent of Europe’s socialist policies.
"The timing of this is no accident. We observe that history’s dominant examples of socialism spring from the major bear markets that follow financial manias..."
Get instant online access to EWI's November European Financial Forecast now, risk-free.