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The Wave Principle Separates You From The Herd
A free Club EWI video crash course switches the lights on for good

By Nico Isaac
Thu, 27 May 2010 15:30:00 ET
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How many of you woke up this morning with this thought in your head: I hope a slew of positive news data is released today so my blue-chip shares go up.
This daily ritual stems from Wall Street's belief in the efficient market hypothesis: the widespread notion that stock markets progress in a linear fashion until some external data/developement comes along and changes the course of prices. Seeing that it's impossible to predict specific news events, it then follows that the markets themselves are innately unpredictable. The best option an investor has is to stay as close to the breaking story as possible and adjust his/her position accordingly.
There's just one problem with this approach; namely, it doesn't work. This is the revelation of Club EWI's newest complimentary Crash Course Video, titled "Why Use The Wave Principle." In it, EWI's senior tutorial instructor Wayne Gorman recalls some of the most dramatic historical events of the last century to show how, over and over, the most "significantly rosy" data did NOT cause stock prices to rise; and the most negative incidents failed to turn stock prices down.
Part One of the video features these (and more) specific examples of flawed, mainstream reasoning:
  • Positive Economic data: Stocks tended to fall after the release of upbeat quarterly GDP numbers from 1960s-early 2000s.
  • Political unrest: US markets rose into the 1960s after a series of profoundly negative political events in the 1930s-1940s [Hitler's rise to power, World War II, the Holocaust, and so on].
  • Natural disasters: 4 of the 5 markets affected by the 2004 Indian Ocean Tsunami continued to rise in the wake of the catastrophe.
Which leads to the slide-show's climactic point: Investors who rely on traditional macroeconomic models to forecast tend to get walloped in the end.
And so, in part two of the video, Wayne focuses on finding a solution. There, he offers these words of wisdom:
"We need a different kind of reasoning, one that will help investors to avoid the pitfalls of [failed cause-and-effect logic.] That's why the Wave Principle is so important... It offers a unique perspective and a market discipline of rules and guidelines that help investors avoid buying at tops and liquidating at bottoms."
It's time to separate from the herd. Get instant access to this exclusive Club EWI resource at absolutely no cost. Simply click on the link and follow the easy steps to becoming one of the many thousands of satisfied Club EWI members.
For existing members, follow this link to stream the "Wave Principle" video on your screen now.

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The Elliott Wave Principle is a detailed description of how financial markets behave. The description reveals that mass psychology swings from pessimism to optimism and back in a natural sequence, creating specific Elliott wave patterns in price movements. Each pattern has implications regarding the position of the market within its overall progression, past, present and future. The purpose of Elliott Wave International’s market-oriented publications is to outline the progress of markets in terms of the Wave Principle and to educate interested parties in the successful application of the Wave Principle. While a course of conduct regarding investments can be formulated from such application of the Wave Principle, at no time will Elliott Wave International make specific recommendations for any specific person, and at no time may a reader, caller or viewer be justified in inferring that any such advice is intended. Investing carries risk of losses, and trading futures or options is especially risky because these instruments are highly leveraged, and traders can lose more than their initial margin funds. Information provided by Elliott Wave International is expressed in good faith, but it is not guaranteed. The market service that never makes mistakes does not exist. Long-term success trading or investing in the markets demands recognition of the fact that error and uncertainty are part of any effort to assess future probabilities. Please ask your broker or your advisor to explain all risks to you before making any trading and investing decisions.