They say that markets “fluctuate.” But despite what most investors believe, those fluctuations are not random – they are patterned. That’s the main idea behind Elliott wave analysis.
This diagram shows an idealized Elliott wave pattern in a bull market: five “steps,” or waves, forward and three “steps” back.
You may say – fine, but what proof do you have that the markets really move like this?
Well, do you remember when the DJIA registered its all-time high? It was at 14,093 on October 12, 2007. That’s when EWI’s monthly Elliott Wave Financial Forecast (EWFF) made this forecast:
Elliott Wave Financial Forecast
November 2007 (data through November 1)
BOTTOM LINE: An across-the-board extreme in optimism toward a wide range of markets should lead to an across-the-board decline. In a rare event that is consistent with EWI’s all-the-same market thesis, stocks, oil, metals, commodities and many foreign currencies all sport recent 90%+ bullish sentiment readings. These extremes typically coincide with market tops.
That forecast was largely based on this Elliott wave picture showing in the DJIA at the time (as presented in the October 2007 EWFF):
As you can see, the Dow’s advance into the October 2007 peak followed an idealized Elliott wave path. And, as the pattern suggested, what would come next was a strong decline.
The Dow’s 54% drop into the 6,470 intraday low on March 6 speaks for itself.
But markets don’t move in straight lines. For every rally, there is a setback. For every decline, there is a correction. And if you’ve been wondering whether or not the DJIA’s latest advance is just a short-term bear market trap or the bottom, wonder no more.
On Wednesday, March 25, Elliott Wave Financial Forecast editors sent an urgent Interim Report to subscribers, explaining why this advance is likely to be more than just a passing blip. In the words of the Interim Report, “...even the greatest moves are not one-way affairs.”
Markets “fluctuate” in predictable patterns – and right now, they are calling for an advance. How big and for how long? Get the answers now in the March 25 Elliott Wave Financial Forecast Interim Report – risk-free.