Contrary to popular belief (in fundamental analysis), there's no such thing as "bad" news or "good" news.
There's only news...
...And in turn the media's constant after-the-fact interpretations of that news as good or bad, depending on the movement of the stock market.
Case in point: Over the past week, the number one story in the financial media has been the inevitability of General Motors filing for Chapter 11. FACT: The 100-year old manufacturing icon is getting booted off the world's leading stock index due to insolvency. This is the first time in history that a Dow Jones Industrial Average component has gone broke.
No matter how hard you try, there is no realistic way to spin this event as a "positive." Yet, somehow, the stock market has succeeded to do the impossible. Here, the following headlines say plenty:
- Dow falls: "Stocks Decline On GM Bankruptcy Fears" (May 27 Forbes)
- Dow falls: "Rally hopes shelved as the likelihood of bankruptcy for GM shook Wall Street" (May 28 Wall Street Journal)
- Dow soars: "Stock Market Shrugs Off GM Filing" (June 1 Reuters)
The same exact news event, unchanged from one day to the next. Yet -- the response from stocks is random and mixed? That makes no sense whatsoever.
Fortunately, there's another option: Elliott Wave International's team of expert analysts. These specialists use only objective, internal measures to gauge the next probable trend in the leading financial markets BEFORE they unfold.
Here, the following archive of EWI's recent publications reveals the true benefit of our insights:
Timing: One week before the U.S. stock market landed at its 12-year low of March 9, our February 27, 2009 Short Term Update utilized a specific turning pattern to outline a specific time window for the onset of a major upside reversal. In STU's own words:
"By all indication, this pattern is back on track... the turn will come on or near March 10, 2009. Anywhere in this time period may mark a turn, which will obviously be a market low."
Elliott Wave structure: Once the bullish winds of change had turned, the March 16 Short Term Update wrote:
"When the market speaks, it behooves us to listen. The implications of this are that the... major stock indexes are in the initial stages of a multi-month advance."
Sentiment: Soon after, the April 2009 Elliott Wave Theorist built on this forecast, saying "The rally should regenerate substantial feelings of optimism."
As the 30%-plus rally since March unfolded, the 3-day per week Short Term Update has likewise kept its finger on the pulse of the stock market and the news. Just this past Friday (May 29) the STU observed, "The impending bankuptcy declaration shouldn't be a surprise to subscribers who've been reading us for awhile" -- yet the STU also knew that bad news can't stop a rally, by showing a chart pattern "which implies that prices are about to thrust sharply higher, pushing well above the May highs (8592 in the DJIA... and 930.17 in the S&P)."
The Financial Forecast Service includes the Elliott Wave Financial Forecast, Bob Prechter's Theorist, and the Short Term Update. Get a complete, risk-free subscription today. Click HERE.