On Jan. 20, mainstream financial outlets were busy calculating all the ways the latest proposed solution to the Greek debt crisis could impact stocks.
"Stocks, euro rally fizzle on Greece" -- Reuters 1/20
"European stocks, euro retreat amid Greece uncertainty" -- AFP, 1/20
"European shares snap 4-day rally as Greek talks continue" -- Reuters, 1/20
But here at EWI, our analysts don't forecast based on the whims of the financial news or "fundamentals", because we know from observing market behavior for over 30 years that news and events are not the markets' driving force.
Instead, we study price chart patterns -- a method we've found much more reliable at predicting trend changes. Let me show you an example using the latest stock rally in Greece.
On Jan. 20, bullish Elliott wave patterns in the charts of Greece's FT-ASE were screaming at Chris Carolan, editor of EWI's European Short Term Update.
After Greek stocks closed at 279, Carolan spotted an Elliott wave pattern that was confirmed by his other technical indicators. His European Short Term Update published this chart and told his readers in the Jan. 20 issue the following (emphasis added):
"The potential now is for a continued sharp rally in coming weeks."
You would agree that, in the face of Greece's ambiguous "fundamentals," Carolan's forecast was radical. Few people expected Greek stocks to surge 21% in a matter of days until a definite solution to the Greek debt crisis was found. On January 20, there still was none.
Yet since that January 20 forecast, Greek stocks indeed soared. Greece's FT-ASE is actually up more than 21% since Carolan's forecast (as of Jan. 31), and the index has gained 27% for the year. A sharp rally indeed, as you can see from the chart below.
Carolan didn't need the news or fundamentals to make this prescient forecast. He simply studied the charts and applied the Elliott Wave Principle's timeless insight that markets are patterned and predictable. Thus, European Short Term Update subscribers were prepared for Greece's steep rise -- even as the mainstream was caught off guard.
Will Greece's good run continue? Put Charles H. Dow Award-winning analyst Chris Carolan to work for you with the 3-times-per-week European Short Term Update -- completely risk-free for 30 days.
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