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Stocks Rebound After the August Crash. Are We Out of the Woods?
Prechter's detailed look at the market's pattern, momentum, sentiment and other important technical evidence helps you navigate stocks from here.
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By Vadim Pokhlebkin
Tue, 20 Sep 2011 14:00:00 ET |
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Reality check: Few investors realize that in just 2 weeks in August, the stock market erased all the gains of 2010 and 2011.
But after those 2 rough weeks in August, stocks rallied for more than 6 weeks -- a rally three times longer than the decline. Does it mean that stocks are out of the woods?
You'll find the answer to this -- and many more questions -- in Robert Prechter's September 2011 Elliott Wave Theorist. (Online now)
In the September 2011 Theorist:
- Are Stocks in Primary Wave 3 Down, or Not? -- Right off the bat, Prechter shows you what few investors realize: unique statistics on the advance/decline ratio, an important measure of market health. On August 8, the a/d ratio hit the lowest reading on record -- meaning that more stocks than ever were down vs. up on that day. Prechter compares the DJIA's a/d readings in 1940, 1987 and 7 other important historical moments to help you come to one conclusion about today's trend.
- A Paradox for You -- Most of the news in late July and early August was good: Congress resolved its debt impasse; the bond market ignored S&P’s downgrade of U.S. Treasuries; S&P 500 stocks reported record earnings. Yet stocks still fell hard in August. How is that possible? Prechter's "How to Interpret News" essay in the new Theorist explains how and why the market fools most investors.
- Earnings -- From November 2010 to July 2011, economists and money managers said good earnings are a bullish sign. Yet the August crash demonstrated that buying stocks based on that mainstream advice was a bad idea. Now Prechter tells you in plain English when you should or should not buy stocks, in the new Theorist.
- Prechter's "Conquer the Crash" Said It First -- Lately, analysts talk about the record positive correlation among S&P stocks, the world’s stock indexes, as well as stocks and other markets. Well, 9 years ago, Prechter's Conquer the Crash observed the start of this trend, forecast its continuation and explained why it was happening. To understand what this unique condition means for the markets today, read the "All the Same Market" section.
- Commodities: Safe Haven... or Not? -- Even some bearish advisors advocate owning commodities. The September Theorist gives you a unique perspective on commodity markets and tells you when the best buying opportunities are likely to present themselves.
- Recovery? Or Double-Dip Recession? -- Bulls say the economy is "recovering." Bears say "double dip" recession. We disagree with both camps. Why? Well, the respite following the 2009 stock market low did little to help real estate, barely touched unemployment, and failed to get the total supply of credit back above its 2008 high -- despite the Fed's unprecedented interventions. So, what ARE we in? Prechter's September Theorist explains.
- Guaranteed Hyperinflation? -- Many analysts say that the record expansion of the Fed’s balance sheet since 2008 all but guarantees hyperinflation. But far fewer people look at the primary engine of inflation: bank lending. The new Theorist does, and shows you the history of the U.S. money multiplier from 1984 to the present. Prechter carefully explains why psychology (not the Fed's balance sheet) is the ultimate driver of inflation and deflation.
- The U.S. Dollar: Still Here! -- Over the past 4 months, the dollar has withstood an upside acceleration in gold to new all-time highs, a huge new all-time high in the Swiss franc, billions of dollars of short sales in the popular "carry trade," and a barrage of hyperinflationary forecasts. Despite all that, the Dollar Index just broke out to a new 6-month high. How in the world?... Prechter gives you one simple answer that trumps all "fundamentals."
- Gold, Silver and the U.S. Economy -- Fact: In a credit-based monetary system such as ours, gold goes up more easily when the economy expands. Did you notice that back in April, silver topped along with the stock market? Learn what kind of sign it is for the economy, and how soon we should expect "the fireworks" if we apply the same model to gold.
- PLUS, you also get Prechter's unique insights into:
- U.S. credit rating downgrade by the S&P
- Steve Jobs and AAPL
- The increasing riots and vandalism around the world
Have Bob Prechter's new, September Theorist and the September Financial Forecast and Steve Hochberg's Short Term Update on your screen in moments. Get all three now with this $99 offer that saves you 57% >>