As the European Union prepares its second aid package for Greece, analysts argue over which country will be next. Yet not one among them looks for answers from the one source that truly matters: the stock market itself.
Why the stock market, you ask? Because the Elliott Wave Principle postulates that the stock market trends reflect social mood. As social mood goes so go stocks -- followed by the economy and the rest of society.
So, instead of arguing over what the Greek crisis mean for stocks, analysts should ask what the trend in stocks means for events in Greece -- and Europe as a whole.
How do you anticipate where Europe's stock markets are headed? Elliott wave to the rescue, again: the July issue of EWI's European Financial Forecast starts by showing you a side-by-side comparison of the FTASE, ISEQ and PSI 20 stock indexes -- and presents careful analysis of what's likely next.
Also in the July European Financial Forecast:
FTSE: British stocks show the clearest Elliott wave structure in Europe right now. The FTSE’s two-month selloff from the May 3 high erased 8% and has been orderly so far. One look at an Elliott wave-labeled chart will tell you why, and what the most likely trend is from here.
Europe's Financial Sector: The largest French bank, BNP Paribus, dropped 17% from its February 2011 peak, while its two smaller rivals, Credit Agricole and Societe Generale, are down 27% and 30%, respectively. The FTSE 350 Banks index, which measures the combined share performance of Lloyds, Barclays, Standard Charter, HSBC, and Royal Bank of Scotland, dropped 10%. There's a price level that you can watch in this index -- and the July European Financial Forecast tells you what it is.
CAC 40 and Eurostoxx 50 Hug Important Trendline: Connect daily closes and intraday extremes in the two indexes and you'll see what the July European Financial Forecast shows you -- namely that the Eurostoxx index has nicked this line 8 times, and the CAC 7 times. Since the market thinks this line is important, so do we. Any sustained break below this line is important -- get the full analysis in the July issue.
The “Light Bulb Moment”: A crucial realization is dawning across the world: Even the biggest economies like the U.S. and Britain aren’t that much different from Greece's, when you use measures like their per-capita debt burdens. Where does that leave smaller economies like Spain? The July issue tracks two measures -- Spain's 10-year bond yields and 5-year credit default swaps -- to gives you answers if the "light bulb moment" in Europe has arrived.
Market Spotlight -- The Euro: You need to see the Elliott wave-labeled chart of the dollars per euro in the July European Financial Forecast to appreciate just how precarious the euro's position is. The section also gives you the latest on the Swiss franc and its future.
Tap into these insights in the just-pubished European Financial Forecast right now via a risk-free subscription to The European Financial Forecast Service. You'll get an invaluable near- and intermediate-term perspective on the European markets you follow -- so you're empowered to invest with confidence and stay one step ahead of the investment herd. Learn more about your risk-free offer>>