On Monday, April 27, and the early morning of April 28, the Dow Jones Industrial Average took a flying leap south in a strong sell-off to four-day lows. As for what caused the market's slide, the mainstream experts had one animal on the brain: Not bull. Not bear. But rather, Pig. Namely: the phase-four hog flu that is rapidly spreading across the planet. To wit:
- "Swine Flu Fears Hit Wall Street" (BusinessWeek)
- "Stocks Set To Plunge On Swine Flu... This will deepen the global recession. The stock market will suffer." (Reuters)
- "Swine Flu Infects Stocks... Economists say the outbreak could derail a global economic recovery if it isn't contained. The flu is going to continue to be a market story." (CNN Money)
One problem: The feral virus has been a smoldering topic in the news for quite some time now. The first official mention of the swine flu outbreak occurred on April 6, when local health officials in La Gloria, Veracruz, Mexico reported that 60% of the town's population was infected with the strain.
(How Sow, Dow Jones? The latest Financial Forecast Service offers the most objective insight into the near-, and long-term trend changes in store for the world's leading stock markets. Get the complete story here.)
Moving right along -- On April 17, the Center for Disease Control & Prevention (CDC) reported the first case of swine flu in the United States with two infected children in southern California.
Then, on April 21, the CDC announced that "human-to-human transmission of this new influenza virus has occurred." Soon after, the words "Pandemic," "Panic," and "Plague" rapidly appeared in the world wide web-osphere.
YET -- in all that time, the U.S. stock continued to rally with gusto, totally immune to the swine flu fears.
The real story on the U.S. stock market is not written by outside events. It is driven by the internal measures of mass social mood, as reflected in Elliott wave patterns unfolding in price charts.
And, right now, the current issue of our Mon.-Wed.-Fri. Short Term Update sets the record straight regarding the next big move to come in the world's leading equity markets. Off the top are these compelling features of the April 27 Short Term Update:
- A powerful close-up of the S&P 500 since May 2007: This chart reveals whether daily sentiment readings signal an uptrend that is in its beginning or latter stages.
- An Elliott wave labeled chart of the S&P 500 from its March 9 bottom showing that over the past week, the rally has repeatedly been thwarted by one main line of resistance. This close-up reveals whether prices have finally broken through that "formidable" barrier.
- An Elliott wave labeled chart of the DJIA since April 1. In STU's own words, the Dow offers the "clearest short-term structure in which to anchor its forecast."