The Rich Witch of Wall Street: Past and Present Penny Pinching
Public school students pay for decades of government's free-spending ways.

By Bob Stokes
6/18/2013 5:15:00 PM

Ultra-rich Hetty Green always wore the same black dress as she walked down early 20th century Wall Street. Thus, Green was nicknamed "The Witch of Wall Street." She was the ultimate penny-pincher. Few people would economize to her extreme, even in tough economic times. But many households have needed to cut back in recent years. So have state and local governments. In parts of big city school districts, the school bells no longer ring for class to start.

Filed Under: conquer the crash, deflation, economic depression, economic indicators, Elliott wave, history, Wall Street

Category: U.S. Economy

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The Fractal of Finance: Seeing Phi in the Stock Market
Scientists say Elliott waves could be the stock market's signature.

By Bob Stokes
6/11/2013 5:15:00 PM

Most of nature's fractals are governed by the Fibonacci sequence. It begins with 0 and 1, and each subsequent number is the sum of the previous two:  0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55 and so on. The Fibonacci sequence also governs the number of waves that form in the movement of aggregate stock prices. Right now, the math of the market reveals a big clue about the trend of stocks.

Filed Under: Elliott wave, Fibonacci, history, market forecasts, phi, Ralph Nelson Elliott, Robert Prechter, stock indexes, technical analysis

Category: Classic Prechter

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Why Brilliant People Often Fail in Financial Markets
Isaac Newton lost $1 million in the South Sea Bubble. He said financial manias are driven by "human folly."

By Bob Stokes
6/10/2013 5:15:00 PM

If intelligence translated to investment success, then most professors and scientists would be wealthy. If anyone ever had "brains," it was Sir Isaac Newton. He lost $1 million in the South Sea Company bubble. Those who fail in financial markets often assume that cold reason governs market prices. But the opposite is true. 

Filed Under: Elliott wave, herding, history, investor psychology, mania, Robert Prechter, social mood, U.S. STOCK MARKET

Category: Stocks

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What You Can Learn by Studying Financial Manias of the Past 400 Years
In the early 1980s Prechter forecast a big bull market, and also said the most severe bear market in US history would follow.

By Bob Stokes
6/5/2013 5:15:00 PM

In 1982 Robert Prechter called for a strong bull market. Most everyone else was mired in the memory of the 1970s, and expected little if anything from stocks. At the same time that Prechter called for a big bull market, he also said the most severe bear market in US history would follow. Has that epic trend change already occurred?

Filed Under: Bear market, bull market, conquer the crash, Elliott wave, history, Robert Prechter, U.S. STOCK MARKET

Category: Stocks

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Americans Recoup Only 45% of Lost Wealth: Brace for the Next Economic Leg
Join the few who will stay safe and prosper in the economic turmoil ahead.

By Bob Stokes
6/3/2013 4:45:00 PM

Five years after the worst of the 2007-2009 financial crisis, Americans have only recouped 45% of lost wealth. The next economic leg down will likely be more severe. Statistics show that the vast majority will be unprepared for a deflationary depression. You can join the fortunate minority.

Filed Under: conquer the crash, credit crisis, deflation, economic depression, economic indicators, Elliott wave, history

Category: U.S. Economy

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"Latter-Day Gatsbys" Push Hamptons Home Rental Prices Toward $1 Million
Today's financial trend comes "once in centuries."

By Bob Stokes
5/28/2013 5:00:00 PM

Some economic commentators say the housing market has bottomed, and the recent rise in residential real estate market activity is a sign of the turnaround. But the renewed strength in real estate is no surprise. Financial history shows that real estate prices tend to trend more-less with the stock market. The question is: Where are we in the trend of financial assets? Consider Robert Prechter's perspective ...

Filed Under: 1929 Stock Market Crash, all the same market theory, Bank of England, CNBC, economic indicators, Elliott wave, great depression, history, home sales, housing prices, market forecasts, stock indexes

Category: U.S. Economy

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Why You Should Expect a Change in the Stock Market
Prepare for a transformation that will seem to come from "nowhere"

By Bob Stokes
5/24/2013 4:30:00 PM

Our individual patterns of thought come under a host of strong influences, especially the collective psychology of society. And the social mood that has taken the stock market to recent new highs has been unfolding for several years. But, history also shows that dramatic changes in investor psychology can come quickly.

Filed Under: Elliott wave, history, long-term trend, rate of change, social mood, U.S. STOCK MARKET

Category: Stocks

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Higher Housing Prices: Prepare for the Flop to Follow the Flip
Will real estate history repeat?

By Bob Stokes
5/10/2013 5:30:00 PM

The National Association of Realtors reports that home prices are up 11.6% year over year. And that has a new surge of house flippers into the real estate market. If the housing market is poised for another dramatic downturn, almost no one sees it coming.

Filed Under: all the same market theory, Bob Prechter, Elliott Wave Theorist, herding, history, housing prices, market crash

Category: U.S. Economy

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As with "Madame Deficit," Heads May Roll During the Next Economic Crisis
The blame game will get serious.

By Bob Stokes
5/6/2013 5:15:00 PM

Marie Antoinette had been a spendthrift early in her reign, but curtailed that habit when she learned what the public thought. Even so, the young French queen had already been nicknamed "Madame Deficit." French debt had ballooned before she and King Louis XVI took the throne. But they received the blame for France's financial straits. Now fast forward to the U.S. economy today. Get ready for the blame game to turn serious.

Filed Under: deficit, economic indicators, Elliott wave, europe, history, Robert Prechter, sentiment, social mood, Sovereign Debt

Category: U.S. Economy

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Even Major News Triggers Only Short-Term Market Reactions
Historical events serve as examples.

By Bob Stokes
4/25/2013 5:00:00 PM

Shortly after 1 p.m. on April 23, a phony posting on Twitter claimed that explosions occurred at the White House and that the President was injured. The Dow Industrials tumbled over 100 points in just a couple of minutes. When traders learned the tweet was false, the Dow just as quickly resumed the trend it had been on beforehand. But whether a given news item is phony or factual is irrelevant. Look at two charts to see how the market reacted to a major historical event.

Filed Under: Dow Jones Industrial Average (DJIA), Elliott Wave Theorist, history, investment decisions, long-term trend, Robert Prechter

Category: Stocks

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The Smell of Tulips is in the Air on Wall Street
All manias end below where they started.

By Bob Stokes
4/23/2013 4:45:00 PM

Tulip prices in Holland skyrocketed in the 1630s. A farmhouse was reportedly purchased with three bulbs in 1633. But the peak of Tulip Mania came in the winter of 1636-37 when someone refused to pay top dollar. Is the U.S. stock market a modern day parallel? Learn why the day may be near when one seller and one buyer agree that prices are too high.

Filed Under: bloomberg, Elliott Wave Theorist, history, mania, market crash, South Sea Bubble, stock indexes, wisdom of crowds

Category: Stocks

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U.S. Markets and the Transition from Greed to Fear
Prechter: "When this piper gets paid, it's going to be an awesome sight."

By Bob Stokes
4/16/2013 5:45:00 PM

Measuring market greed versus market fear can provide a useful tool for gauging investor sentiment. EWI looks at investor sentiment as well as the market's momentum and price pattern. Altogether, they provide a valuable perspective on whether greed or fear will prevail in the future. Robert Prechter offers his perspective on the market's current juncture.

Filed Under: Dow Jones Industrial Average (DJIA), Elliott wave, history, market crash, Robert Prechter, sentiment, VIX, Wall Street

Category: Stocks

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The Single Most Important Leading Economic Indicator
History shows the stock market leads the economy.

By Bob Stokes
4/11/2013 5:45:00 PM

The phrase "leading economic indicators" refers to a core set of data points: the Consumer Price Index, real earnings, employment, U.S. Import and Export Price Indexes, Producer Price Index and so on. And Forbes recently listed several unusual economic indicators which include lip stick and wine auctions. Learn about the single most important economic indicator that trumps them all.

Filed Under: economic indicators, Elliott Wave Theorist, history, Robert Prechter, stock indexes

Category: U.S. Economy

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Just Watch the Next Bear Market on Television
Better to be a spectator than a participant in this event

By Bob Stokes
4/8/2013 4:45:00 PM

When you consider what's on television, one wonders if human nature has changed very much since Romans packed the Colosseum for gruesome entertainment. One cable channel offers wall-to-wall coverage of a famous murder trial. The 2007-2009 financial crisis turned into a made-for-TV drama. The next bear market could turn out to be an even bigger television spectacle. The Wall Street classic, Elliott Wave Principle: Key to Market Behavior, states that "human nature does not change."

Filed Under: Bear market, Elliott Wave Principle, Elliott Wave Theorist, financial forecast, herding, history, market forecasts, Robert Prechter, stock indexes, wisdom of crowds

Category: Stocks

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The Housing Recovery Rests on an Unstable Foundation
Yale's Robert Shiller says the recent rebound in home prices is "artificial"

By Bob Stokes
3/28/2013 5:30:00 PM

The housing market has gone from financial rubble to what some analysts describe as another bubble. It's true that home prices are still nearly 30% below their mid-2000s peak. Yet the recent surge has Robert Shiller of the Case-Shiller Home Price Index concerned. Learn why.

Filed Under: 1929 Stock Market Crash, all the same market theory, CNBC, commercial real estate, economic indicators, Elliott Wave Theorist, foreclosures, great depression, history, home sales, housing prices, quantitative easing, U.S. Federal Reserve (the Fed)

Category: U.S. Economy

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NASDAQ's 15% Drop in 2000: a Snapshot of Market History or a Picture of its Future?
Is increased stock market volatility just ahead?

By Bob Stokes
3/27/2013 5:15:00 PM

From March to April 2000, the NASDAQ declined 15%. Many investors bought the dip in the months after the peak, but it was only the beginning of a larger decline. In the 2000-2002 price plunge, the technology-heavy index lost a whopping 78%. Do investors today have a similar mindset to the prevailing market psychology of 2000? Recent sentiment measures say "Yes."

 

Filed Under: Bear market, buy and hold, Dow Jones Industrial Average (DJIA), Elliott Wave Theorist, financial forecast, history, investor psychology, market crash, Nasdaq Composite, Robert Prechter, sentiment, VIX, volatility

Category: Stocks

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Use Your Imagination to Prosper During an Economic Downturn
Which job skills will be in strong demand during an economic storm?

By Bob Stokes
3/21/2013 5:30:00 PM

You can prosper during an economic downturn by using your imagination. In the second edition of Conquer the Crash, Robert Prechter writes: "If you have a choice of employment, try to think about which job will best weather the coming financial and economic storm. ... If you are entrepreneurial, start thinking of ways to serve people in a depression so that you will prosper in it. ... Think about what people will need when times get hard."

Filed Under: economic indicators, Elliott Wave Theorist, financial forecast, history, Robert Prechter, unemployment

Category: U.S. Economy

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Two Big Names Give 'Thumbs Up' to the Stock Market
Plus, a former bear switches camps

By Bob Stokes
3/20/2013 4:45:00 PM

When it comes to reaching a large audience, few voices can compete with the U.S. Secretary of the Treasury, or with the former Chairman of the Federal Reserve. One of each has recently given their blessing to the stock market. Many investors will be assured by these bullish comments from well-known people. Yet it's fair to ask whether today's extreme bullish market sentiment -- after a four-year rally -- should perhaps startle market participants. Indeed, the evidence suggests that this juncture in the financial markets is so rare that no living market participant has ever experienced a time like it.

Filed Under: 1929 Stock Market Crash, CNBC, Elliott wave, history, investor psychology, sentiment, U.S. STOCK MARKET

Category: Stocks

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Bear Markets Are Inevitable
Are you prepared for the next one?

By Bob Stokes
3/18/2013 4:45:00 PM

Bear markets are a conspicuous part of American history. Yet several sentiment measures indicate that most of today's market participants are ignoring this obvious fact. And unless human behavior changes and history stops repeating itself, another bear market is inevitable. It's only a question of when. The Elliott wave model explores that question, and also looks at the extent of market price trends.

Filed Under: Bear market, Dow Jones Industrial Average (DJIA), economic depression, history, investment strategy, long-term trend, market forecasts, S&P 500

Category: Stocks

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U.S. Stock Buyers: Beware the Pitfalls of Trend Extrapolation
Change is the only constant in life

By Bob Stokes
3/11/2013 5:30:00 PM

Most people tend to extrapolate today's trends into tomorrow. The irony is that when the crowd reaches a consensus about a trend, that's when it's likely to change. For example, when most everyone agrees that a championship sports team can do no wrong, it usually marks the time when the team's fortunes start to turn south.

Filed Under: Elliott wave, history, mania, Robert Prechter, sentiment, stock indexes, wisdom of crowds

Category: Stocks

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