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Earthquake, Tsunami, Oil-shock, Middle East Wars, Debt Melt-Downs
Will the Market Reward That Much "Unbending Loyalty"?

By Nico Isaac
Fri, 08 Apr 2011 16:30:00 ET
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The public's commitment to US equities is starting to resemble a country western song. Investors have chosen to "stand by their stocks," come what may in global politics and finance, including:
 
  • One of the most politically unstable climates in recent history, as civil protests and military conflict spreads across the Middle East and North Africa
  • A series of devastating natural and man-made disasters from Japan to New Zealand to Europe
  • Multiple sovereign crises that will not go away
  • The rapidly receding cash reserved of pension funds
  • And the fact that the S&P 500 is trading at the same level today as it did 12 years ago.
But like the lyric says: Been down so long so low, there's only one place left to go -- up. The rally in the major indexes from mid-March has appeared to stoke "worst-is-over" sighs of relief.
 
Will the market reward this much unbending loyalty? The April 2011 Elliott Wave Financial Forecast reveals the answer.
 
Nothing reflects the return of confidence like the recent comeback of "Pay-In-Kind" bonds. These toxic instruments allow companies to pay off their debt with more debt -- literally. The April Financial Forecast recalls the outcome of last time PIK bonds were so widely popular.
 
Beyond the United States, Financial Forecast goes overseas to see how global markets are faring. Our analysis considers: 
 
  • Germany's economic recovery PLUS the EU bailout of Greece and Ireland: Why this has NOT lessened the public's fear of sovereign debt default
  • Soaring Oil Bad for Stocks? Our chart shows the two markets moving in near lock-step for the last three years
  • The glaring flaw in the notion that silver's value increases whether the economy gets better or gets worse
  • A sober, fact-based look at the Japanese stock market, before & after the tsunami/earthquake -- read for yourself the quote which forecast "falling stock prices" before the natural disaster
  • If bad news is bearish, then why did Japanese ETF's see their largest cash INFLOW in 15 years in the week after the March 11 tsunami/earthquake?
  • And if the whole world -- including 96% of traders -- are bearish the US dollar, can it mean a price reversal at four degrees of trend? Our chart shows the answer.
There's more. Consider the glaring fact that no amount of optimism means diddly-squat unless the engine of economic recovery -- the US housing market -- gets back on solid ground. That's why the April Financial Forecast saves the most arresting insight for last: a two-part study of annualized housing starts and median home prices, which shows beyond dispute whether the property bull really is "reawakening."
 
Has the trend finally turned? Does the rising cost of fast-food burritos and gasoline signal a shift toward economic and environmental inflation? The charts and commentary in this issue are objective and original in ways you simply cannot read and see elsewhere.
 
Get the exclusive story today with a risk-free subscripton. Plus, you'll have instant access to the recently archived March 2011 Financial Forecast.

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