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Raise Your Hand if You Believe Earnings Drive Stock Prices
Now, a mountain of evidence proves why this long-accepted belief is sorely misguided

By Nico Isaac
4/9/2013 6:00:00 PM

April is national Finanical Literacy month. With that in mind, we ask one simple true or false question: Do earnings drive stock prices? Wall Street and the financial media think the answer is as obvious as the blue sky on a cloudless day. In fact, when the 2013 corporate earnings season kicked off on April 8, the news was flooded with stories confirming the supreme role of earnings in market trends.

Filed Under: Bob Prechter, earnings, Elliott wave, Elliott Wave Theorist, financial forecast, market myths, Robert Prechter, S&P 500, U.S. STOCK MARKET, Wall Street

Category: Stocks


Why Conventional Stock Analysts Stumble When They Look to the Economy

By Bob Stokes
1/9/2013 5:00:00 PM

It's futile to use the jobless number, gross domestic product, home sales, factory orders, corporate earnings, consumer spending -- or any other economic indicator -- to forecast stocks. Learn why.

Filed Under: Bob Prechter, earnings, economic indicators, Elliott wave, fundamental analysis, gross domestic product (GDP), home sales, housing prices, market forecasts, social mood, unemployment

Category: U.S. Economy


What Role Do Earnings REALLY Play In the Future of Alcoa Inc?
Over the past year, there has been no consistent correlation between positive earnings-per-share in Alcoa Inc. AND rising stock prices. Consider this.

By Nico Isaac
1/9/2013 4:45:00 PM

On Jan. 8, the financial media was astir as the first Dow Jones-listed company, Alcoa, reported its fourth-quarter 2012 earnings: Actual earnings and revenue came in as expected at 6 cents per share on $5.9 billion. And, according to the mainstream experts, a stable or rising trend in earnings will fuel the upside of stock prices. End of story. But really, the story is just beginning.

Filed Under: aluminum, earnings, Elliott wave, Elliott Wave trading, precious metals, Traders

Category: Gold and Silver


S&P 500: "Uncertainty" Does Not Have to Prevail
Think of Elliott waves as a map.

By Vadim Pokhlebkin
10/2/2012 7:30:00 PM

Three factors were blamed for the volatile stock market trading we've seen this week: uncertainty over Spain's bailout and U.S. stock earnings, and a strong U.S. manufacturing report. On balance, said the experts, these factors gave us a lot of volatility, but little net progress. And here's how an Elliott wave trader might have looked at this week's market action...

Filed Under: diversification, earnings, Elliott wave, S&P 500, technical analysis, trade targets, U.S. STOCK MARKET, volatility

Category: Stocks


Why Investor Expectations Are So Often Shattered
Market patterns reflect the Wave Principle

By Bob Stokes
9/25/2012 5:30:00 PM

Long-term charts show no consistent relationship between stock index prices and interest rates. In fact NO outside event -- including major historical news -- drives stock trends. Consider the death of...

Filed Under: earnings, Elliott wave, Interest Rates, Robert Prechter, U.S. STOCK MARKET

Category: Stocks


Listen: EWI's Chief Analyst Hochberg Explains Recent Action in Stocks, U.S. Dollar and More
Listen to Hochberg explain the problems with using lagging economic indicators like earnings

By Alexandra Lienhard
5/29/2012 4:45:00 PM

EWI Chief Market Analyst Steven Hochberg talks with MarketWrap radio about recent market action and where we are in the long-term trend, among many other topics.

Filed Under: earnings, economic indicators, Gold, interview, long-term trend, steve hochberg, U.S. dollar

Category: Stocks


Strange Recovery
Is it strange in here, or is it just...strange?

By Vadim Pokhlebkin
5/1/2012 4:00:00 PM

Something doesn't feel right. Look at this:

Filed Under: Bob Prechter, consumer confidence, earnings, Elliott wave, home sales, Robert Prechter, S&P 500, social mood, unemployment

Category: U.S. Economy


U.S. Stocks: What You Need to Know About Earnings Season
If earnings do not drive the market's trend, what does?

By Bob Stokes
4/17/2012 3:30:00 PM

It's earnings season. And like they do every quarter, stock market observers want the answer to the ritual question: Will earnings drive stock prices higher or lower? The premise that earnings drive stock prices is so ingrained that it's not a question of whether earnings steer stock prices, but how will earnings steer the indexes. Here's what you need to know...

Filed Under: earnings, Elliott wave, fundamental analysis, market forecasts, S&P 500, stock indexes

Category: Stocks


Dow Industrials: The Next 2,000 Points
Is the major trend up or down?

By Bob Stokes
4/12/2012 5:00:00 PM

Do price/earnings ratios (or any other measure of value) really tell us why stocks rise or fall? Read what Robert Prechter wrote in the...

Filed Under: earnings, Elliott wave, fundamental analysis, investment strategy, Robert Prechter, S&P 500

Category: Stocks


Earnings: A Never-Ending Wild Goose Chase
"Projected earnings are the single worst indicator to use in an attempt to forecast markets" -- EWI's Short Term Update

By Vadim Pokhlebkin
1/11/2012 3:00:00 PM

Please see if you can guess when this quote was published: ... If you guessed that this is today's quote -- after all, we are in the midst of another earning season -- good guess, but no.

Filed Under: diversification, earnings, Elliott wave, Elliott Wave trading, stock market cycles, technical analysis, technical indicators

Category: Stocks


Famous Stock Market Myths Exposed: Part Two, Do Earnings Lead Stocks?
See this mind-blowing chart that shows you how earnings don't lead, but rather lag stock market price trends

By Nico Isaac
1/5/2012 10:30:00 PM

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.

Filed Under: Dow Jones Industrial Average (DJIA), earnings, Nasdaq Composite, S&P 500

Category: Stocks


2012 Stock Outlooks: Are Those "Year End" Stories Worth a Tinker's Dam?
Try a different perspective that you may find valuable.

By Bob Stokes
12/16/2011 5:45:00 PM

Investment outlooks are usually based on fundamentals. A bullish outlook on stocks, for example, is sure to quote investment professionals who cite earnings or expected earnings. But do earnings drive stock prices? Take a look at the chart...

Filed Under: earnings, market forecasts, personal finance, Robert Prechter, S&P 500

Category: Stocks


What Are the BEST Technical Indicators for Successful Trading?
8 technical analysis tools that give any trader an edge

By Vadim Pokhlebkin
11/10/2011 5:15:00 PM

You may have seen a TV ad where "traders" describe their strategies, and one says, "I trade on fundamentals." That sounds very reassuring -- except, which “fundamental” factor trumps the other? Which one carries more weight in your forecast? Your guess is as good (or bad) as anybody’s. Your alternative is technical analysis...

 

 

Filed Under: earnings, Elliott wave, Elliott Wave Education, Elliott Wave trading, europe, technical analysis, technical indicators, trading lessons

Category: Stocks


Earnings: Stock Market's Brightest False Beacon
"Earnings estimators are too pessimistic at bottoms and too optimistic at tops," explains EWI's president Robert Prechter

By Vadim Pokhlebkin
10/24/2011 3:15:00 PM

Four times a year, investors and Wall Street watch the quarterly corporate earnings reports, trying to anticipate the trend in stocks. Another earnings season is upon us right now -- so read this excerpt and see these two charts...

Filed Under: banks, Club EWI, diversification, double dip, Dow Jones Industrial Average (DJIA), earnings, economic depression, Elliott wave, Elliott Wave Theorist, Nasdaq Composite, S&P 500

Category: Stocks


Your Portfolio is STILL Historically Overvalued

By Susan C. Walker
7/15/2011 3:15:00 PM

This insightful and well-crafted chart, showing year-end stock market valuations, is a case in point of how one picture shows more than many words can tell.

Filed Under: Robert Prechter, earnings, stock indexes, Treasury bills (T-bills)

Category: Classic Prechter


Earnings Data: Benchmark in Sheep's Clothing
A stunning chart from Bob Prechter's April Theorist shows how earnings data is not a benchmark at all

By Nico Isaac
5/16/2011 6:00:00 PM

In the rough seas of financial forecasting, the mainstream "captains" have always relied on certain time-honored tools for navigation: Breaking news, GDP figures, political scandals, weather patterns, and so on. But of all the measurements, there is one gauge widely considered to be the "North Star" of financial prognostication -- that ever-fixed mark in the economic sky that always points to the "true" future performance of major stock averages. And that gauge is earnings.

Filed Under: Robert Prechter, earnings, Efficient Market Hypothesis (EMH), Elliott Wave Theorist, gross domestic product (GDP), Robert Prechter, unemployment

Category: Stocks


Stocks Rally On the News of Bin Laden's Death, You Say? It's Not That Simple
Interest rates, oil prices, trade balances, corporate earnings and GDP: None of them seem to be important, or even relevant, to explaining stock price changes

By Vadim Pokhlebkin
5/2/2011 5:30:00 PM

MarketWatch.com ran an interesting story on May 2 that quoted from a research paper which found "little evidence that non-economics events have a big effect on the stock market." Here at EWI, we go one step further and say the following: Economic events have little impact on the stock market, too. Don't believe us? See this chart.

Filed Under: Campaign for Independent Thinking, deficit, earnings, Efficient Market Hypothesis (EMH), Elliott wave, Elliott Wave Principle, gross domestic product (GDP), Robert Prechter, Robert Prechter, S&P 500

Category: Stocks


Watch Earnings Reports? Then See This Chart
"Earnings estimators are too pessimistic at bottoms and too optimistic at tops," writes Robert Prechter

By Vadim Pokhlebkin
4/26/2011 3:30:00 PM

Four times a year, investors and Wall Street watch the quarterly corporate earnings reports, trying to anticipate the trend in stocks. Another earnings season is upon us right now -- so read this excerpt from our free Club EWI report, "Market Myths Exposed."

Filed Under: diversification, earnings, Elliott wave, Nasdaq Composite, New York Stock Exchange (NYSE), Robert Prechter, Robert Prechter, S&P 500, stock indexes

Category: Stocks


Earnings Season: Strong Earnings Mean a Strong Stock Market -- Right?
Earnings season is upon us, so it's a good time to delve into how earnings affect stocks -- or if they do at all

By Debbie Hodgkins
4/1/2011 11:15:00 AM

Suppose you were to be guaranteed that corporate earnings would rise strongly for the next six quarters straight. Reports of such improvement would constitute one powerful "information flow." So, should you buy stocks?

Filed Under: Campaign for Independent Thinking, earnings, Elliott Wave Theorist, fundamental analysis, Robert Prechter

Category: Stocks


Quantitative Easing: Why It Has NOT Brought Back Inflation
EWI's new groundbreaking FREE eBook teaches you how to think and invest independently

By Vadim Pokhlebkin
3/23/2011 9:30:00 AM

During hyperinflation, interest rates typically rise to double digits per month. Inflationists find it difficult to reconcile the Fed’s massive balance sheet growth since August 2008 with short term rates at zero. But deflationists understand why investors are willing to hold government paper at such low returns...

Filed Under: Ben Bernanke, Robert Prechter, credit crisis, crude oil, deflation, earnings, Elliott Wave Theorist, gold futures, hyperinflation, inflation, liquidity, M3 money supply, market manipulation, monetary policy, monetization, Robert Prechter, quantitative easing, stimulus package, U.S. Federal Reserve (the Fed)

Category: U.S. Economy


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© 2013 Elliott Wave International

The Elliott Wave Principle is a detailed description of how financial markets behave. The description reveals that mass psychology swings from pessimism to optimism and back in a natural sequence, creating specific Elliott wave patterns in price movements. Each pattern has implications regarding the position of the market within its overall progression, past, present and future. The purpose of Elliott Wave International’s market-oriented publications is to outline the progress of markets in terms of the Wave Principle and to educate interested parties in the successful application of the Wave Principle. While a course of conduct regarding investments can be formulated from such application of the Wave Principle, at no time will Elliott Wave International make specific recommendations for any specific person, and at no time may a reader, caller or viewer be justified in inferring that any such advice is intended. Investing carries risk of losses, and trading futures or options is especially risky because these instruments are highly leveraged, and traders can lose more than their initial margin funds. Information provided by Elliott Wave International is expressed in good faith, but it is not guaranteed. The market service that never makes mistakes does not exist. Long-term success trading or investing in the markets demands recognition of the fact that error and uncertainty are part of any effort to assess future probabilities. Please ask your broker or your advisor to explain all risks to you before making any trading and investing decisions.