On Monday, June 22, Wall Street opened with gains across the board. Analysts immediately attributed the rally to China's decision to allow the yuan to gradually revaluate against the U.S. dollar. Here are some of the morning's headlines from major news agencies:
- US Stocks rise as Street cheers China currency move
- Wall St. jumps on China yuan move...
- China's Yuan Move Boosts US stocks
But just hours later, as the DJIA ended the rally and fell into the red, the same media outlet reversed course and blamed the markets' fall on the yuan, too.
- U.S. stocks slide as investors rethink China move
- U.S. stocks trim advance as China move questioned
Every day, headlines chase market action, trying to find the story that "explains" it best. But even if the "explanations" actually make sense, you are still left with one very important question, namely:
OK, so the market fell/rallied because of [this or that news]. Good to know -- but where is it going next?
The Wave Principle, on the other hand, focuses on what really drives prices: market psychology. You get an objective set of rules that provide specific, calculated forecasts -- without having to sift through a mixed bag of news stories, trying to decide what's bullish and what's bearish.
Where's the yuan headed? You get a clear, objective Elliott wave forecast of the yuan in "China's Stealth Revaluation," a special section of the June 2010 Global Market Perspective. EWI's currency experts tell you where the yuan is headed -- and what it means for the future of the Chinese economy. Learn more >>