On January 4, I began a three-part series titled "Famous Stock Market Myths Exposed." The first piece tried to dispelled the widely held notions of the stock market's consistent seasonal biases.
Today, let's look at another backbone of mainstream economic thought: that earnings are the driver of stock market trends. Here, the following January 5 news item captures the sentiment:
"S&P falls after a disappointing profit forecasts from American retailers offset improving jobs data. The disappointing earnings forecast can weigh down stocks." (SF Gate)
Three years ago, in the December 2009 Elliott Wave Financial Forecast, EWI's analysts exposed a fatal flaw in this notion:
As you can see, for the past whole decade, strong earnings coincide with market peaks, and weak numbers with lasting bottoms! Why no one in the mainstream finance talks about it is a mystery to us...
There is no way to outrun the false "news-moves-the-markets" causality espoused by the mainstream experts.
But there is a way to outwit it -- via objective Elliott-wave insight into the near-, and long-term trends underway in the world's leading markets.
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