We all know about the tragic earthquake and tsunami in Japan on March 11.
The event reverberated throughout the world. It was also blamed for the losses in Japan’s NIKKEI 225 stock index. But did you know that the NIKKEI’s decline stopped and reversed right at a Fibonacci price support level of 61.8%?
It's true that the news can drive short-term market spikes. Yet at EWI, we know that social mood ultimately controls the larger financial trends. Social mood appears in market charts via Elliott wave patterns and Fibonacci ratios between price moves. So what looks like a random move to most investors is a recognizable pattern to an Elliottician. The NIKKEI's price action is a vivid example.
Social mood as the markets’ main driving force is a concept EWI’s president Robert Prechter first introduced years ago. The brand-new, April Asian-Pacific Financial Forecast now tells you what Elliott wave patterns of social mood suggest for the Asian-Pacific markets -- and cultures -- in the weeks ahead.
How Can Markets Be SO Non-Rational? Our readers often say that “markets don’t make sense”: They rally after bad news; they fall after good; they defy the logic of “fundamentals” left and right. (For example, New Zealand’s NZSE stock index rallied after the September 2010 quake in Christchurch.) The media rationalizes market reactions to try and make sense of them -- but always in retrospect. Well, that’s not good enough. The Elliott wave model offers you a far superior way to understand and forecast the markets. The opening section of the April issue explores this idea further by using some of the most recent examples -- and comes to a conclusion that will probably surprise you.
India: Last month's issue discussed how Indian investors had recently shunned stocks in favor of money market funds; global fund managers had similarly turned very bearish on emerging markets. March brought more anecdotal evidence that sentiment has reached an extreme in India. The April Asian-Pacific Financial Forecast explains what this likely means for the SENSEX. Plus, you get an Elliott wave take on the recent corruption scandals in India.
China: Conventional observers have cited the recent Arab revolts as the "cause" of increased authoritarianism in China. But Elliotticians know that the timing of China's crackdowns is no accident; it fits well the long-term Elliott wave pattern in the Shanghai Composite index. Find out what the Elliott wave count going forward means for China's stocks -- and its civil liberties.
Australia: The recent downtrend in Australia's social mood -- as measured by the country's ASX 200 stock index -- appears to have caused more trouble for the ruling Labor Party, which lost the recent elections in a landslide. But the opposition Liberal-National coalition shouldn't get too comfortable in their victory. Elliotticians know well of the correlation between social mood (i.e., stocks) and politics. So until a new bull market is well under way, no incumbent party can feel secure. Find out just when that may be in the Australia section.