Every day, the mainstream financial experts attempt to explain away fluctuations in stock market trends with some "fundamental factor" du jour, all of which boil down to this: good news causes a market to rise and bad news -- to fall.
Problem is, sometimes the experts end up using the same "fundamental" to justify the market's upward AND downward moves. Case in point: The following string of recent headlines regarding the expected "QE2":
October 15, 2010, around 10 AM Eastern. The DJIA is up. The media says:
- US Stocks Rise As Bernanke's Comments Provide Boost (Wall Street Journal)
- Stocks Rise As Bernanke Reassures Fed Ready To Act (CNBC)
- Wall Street Jumps As Fed Boss Himself Hints At Stimulus (Economic Times)
-- VERSUS --
October 15, 2010, around 4PM Eastern. The DJIA is down about 30 points:
- U.S. stocks wavered Friday as comments from Federal Reserve Chairman Ben Bernanke reinforced expectations for the central bank to move to prop up the economy. (Dow Jones)
How can the same event -- Ben Bernanke's speech -- be bullish AND bearish for the stock market? You might as well say that it moves at random, as most people do. But before you join them -- consider that there may be something other than "fundamentals" driving trends.
A groundbreaking 13-page report by EWI president Robert Prechter titled "The Human Social Experience Is A Fractal" offers evidence to support the latter scenario -- that price movements in stocks are, in fact, ordered. Prechter provides you with the actual, annotated research of the person who discovered the Elliott Wave Principle founder, Ralph Nelson Elliott. He saw the fractal, a pattern that repeats in form but not in time or amplitude, as the overriding design of all stock market progress and regress. From R. N. Elliott's own research,
"The wild, senseless, and apparently uncontrollable changes in prices from year to year, from month to month, or from day to day link themselves into a law abiding rhythmic pattern of waves... Current news and political developments are of only incidental importance, soon forgotten. Extensive research in connection with what may be termed human activities indicates that practically all developments which result from our social-economic processes follow a law that causes them to repeat themselves in similar and constantly recurring series of waves or impulses of definite number and pattern."
This diagram shows you Elliott wave fractal's idealized development and subdivisions:
In the remainder of the "Human Experience" report, Prechter reveals to you the modern-day implications of the Wave Principle.