Wednesday, March 9, was the second anniversary of the rally in U.S. stocks off their March 9, 2009, bottom.
And, judging by the slew of "Happy Birthday, Bull!" headlines splashed across the mainstream financial media circuit, one can safely make this assumption: The last remaining fence-sitters have finally jumped off the paling and joined the "buy-and-hold" party. In the words of one March 9 news source:
"Two years after the market low, the little guy is back... finally ready for more risk and hoping the rally has further to go. It didn't feel right to be back in until now. I believe we've come through the worst of it." (ABC News)
Adds another:
"Even though the bull is moving into middle age, there are upbeat signs that suggest it may have the stamina to continue churning out gains... It's kind of like the stock market and economy are rediscovering their youth." (USA Today)
There's just one nagging issue here. Many of the same experts who now see more candles for the bull's future birthday cakes were fitting said animal for a coffin at the 2009 bottom. Instead of turning bullish, these late February 2009 news items capture the doom and gloom in its full glory:
"Dow 5,000? A Bearish Possibility." (Wall Street Journal)
"I don't want to sound like the grim reaper, but it's possible that one of the [major] averages could come down by... another 50% drop from here. This is a slow-drip, slow-death decline." (LA Times)
"It's going to continue its easiest path, and that path it sees is down. That's where we're stuck right now and who's going to get out in front of it?" (AP)
That's the problem with conventional approach to market forecasting: As a rule, mainstream bears get more bearish at the bottom, while bulls only turn more bullish as market tops. And when the turn comes -- surprise!
Elliott wave analysis, on the other hand, attempts to alert you of the market's big turns before they come. In early 2009, for example, EWI's team of analysts began to turn bullish and suggested the time to "get in front of" stocks had arrived.
The launch of EWI's bullish outlook debuted with the February 23, 2009, special "Investment Issue" Elliott Wave Theorist. There, EWI's president Robert Prechter opened his commentary with the following crowd-parting remarks:
"...Ideally the S&P should continue down into the 600s. The market is compressed, and when it finds a bottom and rallies, it will be sharp and scary for anyone who is short. I would rather be early than late. We should focus now more than ever on keeping money safe."
Soon after, our February 27, 2009, Short Term Update identified 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."
And finally, our April 2009 Elliott Wave Financial Forecast anticipated a resurgence in optimism alongside the rally in stocks and wrote:
"Be Prepared: the advance will reignite some of the zaniness of 1999 and 2007. Many market followers and economists will proclaim that the bear market is dead and the boom is back."
Flash ahead to today -- and the latest, March 2011 Elliott Wave Financial Forecast observes that "psychology" has now come "full circle." You also get a compelling chart of the S&P 500 that reveals whether the market's momentum reflects a "young bull market."