EWI subscribers and free Club EWI members often ask us whether Elliott wave analysis works on every market, or just some of them.
Our answer is based on three decades of observing market behavior: You can see consistent wave patterns in the price charts of any liquid, freely-traded financial market.
Take Greek bonds. They've been a hot news item lately because of how much, in terms of bond yields, the Greek government has had to pay to get investors to buy Greek debt. But as early as mid-May -- weeks before the details of the Greek austerity measures were ironed out -- Elliott wave analysts were on the record: bailouts or not, Greek bond yields would rise further.
[Greek 10-year Yields] We revisit Greek bond yields today. For the third time in recent months, we can spot a triangle forming in yield prices in Greece or Spain. Each time, we’ve remarked that triangles are, ultimately, continuation patterns and higher yields are expected. This example is no different. The message here is simple: The advance in Greek yields is not over!
The reason our European Short Term Update expected higher yields on Greek 10-year bond in mid-May is pure Elliott. The first chart shows a contracting triangle, a pattern that ends in a sharp thrust in the direction of the previous trend -- higher, in this case.
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