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Consumer Confidence Hits a 6-Year High: Bullish for Stocks?

Vadim Pokhlebkin — Fri, 17 May 2013 16:15:00

To decipher the meaning of economic reports like consumer confidence is the bread and butter of "fundamental" analysis. Inevitably, positive data are supposedly bullish for the stock market, while negative economic reports are bearish. But is this accurate? What a strange question, you may say -- of course it is! Stocks don't fall after good reports, or rise after bad ones...do they? Well, take a look at these financial news headlines and guess when they were published...

Forecasts for the Dow Industrials: Off the Charts and Then Some

Bob Stokes — Wed, 15 May 2013 14:30:00

The February Elliott Wave Theorist noted that "money managers are predicting a Dow as high as 60,000." If you think that is way too optimistic, look at this other forecast.

Initial Public Offerings of 2013 Meet the Manias of 2007 and 1929

Bob Stokes — Mon, 13 May 2013 17:00:00

How can you tell when stock market optimism has turned "fervent"? One historically sure sign is that a rush of companies go public. The year 1999 was a perfect example. Large numbers of Internet companies with zero revenue went public. The fervor didn't last, as you may recall. 2007 was also a busy year for IPOs -- and another major market top. Now consider the IPO levels of 2013.

The Most Efficient Path of the Stock Market Unfolds at Large Degree

Bob Stokes — Wed, 08 May 2013 12:45:00

In the 1920s, R.N. Elliott was a successful author, consultant and accountant. But late in that decade he contracted a debilitating and near-fatal illness that left him bedridden. He chose to pass the time by studying the stock market's price patterns. His career had required meticulous attention to detail, and in turn he applied that rigor to his study of the market. Learn about his fascinating discovery and how it's relevant today.

Stock Market High-Flyers Often Crash to Earth

Bob Stokes — Tue, 30 Apr 2013 18:00:00

No one ever tells you that in the history of this world, far more stocks have eventually gone to zero than have survived to the current day...

Even Major News Triggers Only Short-Term Market Reactions

Bob Stokes — Thu, 25 Apr 2013 17:00:00

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.

The Smell of Tulips is in the Air on Wall Street

Bob Stokes — Tue, 23 Apr 2013 16:45:00

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.

Triple Top: The S&P 500 Goes Nowhere for 13 Years

Bob Stokes — Fri, 19 Apr 2013 16:45:00

Technical analysts describe a triple top formation as a textbook "reversal" pattern. After the third peak, the downward price trend that follows may be steep and break below the two prior lows. If that break occurs, prices could descend into free-fall territory. In his March 2013 issue of The Elliott Wave Theorist, Robert Prechter refers to "the 13-year triple top ... from 2000 to 2013." What's more, this pattern does not stand alone.

U.S. Markets and the Transition from Greed to Fear

Bob Stokes — Tue, 16 Apr 2013 17:45:00

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.

Be On the Right Side of Risk-On Markets When the Herd Turns Risk-Off

Gary Grimes — Mon, 15 Apr 2013 14:30:00

A growing number of investors – especially institutional investors – are positioning their money based on an observation The Elliott Wave Theorist published back in 2002. Asset classes such as stocks, bonds, commodities, metals and energy are more correlated than ever (the US dollar is inversely correlated). As far as we know, the Theorist was the first investment publication to talk about this phenomenon, likewise the first to give it a name ...

Investors Pile $61 Billion into Stocks (But Look Who's Selling)

Bob Stokes — Fri, 12 Apr 2013 16:00:00

A financial professional recently opined on television that "You have to be in this market." Investors beat him to the punch. They've piled $61 billion into stock funds and ETFs so far in 2013. Inflows are on track to be the largest since 2000. But not everyone is buying. Learn about one group that's been selling at a frantic pace.

A Perspective on a Forecast for Dow 18,000

Bob Stokes — Wed, 10 Apr 2013 17:00:00

People who only consider the short-term – or hold an overly narrow point of view – can benefit from the advice to "put things into perspective." Because without perspective, we're certain to repeat the same short-sighted decisions, one after another. In his latest Elliott Wave Theorist, Robert Prechter puts the stock market's price pattern into proper perspective. The issue starts with the title, "More Amazing Charts."

Raise Your Hand if You Believe Earnings Drive Stock Prices

Nico Isaac — Tue, 09 Apr 2013 18:00:00

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.

Just Watch the Next Bear Market on Television

Bob Stokes — Mon, 08 Apr 2013 16:45:00

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."

S&P 500 Follows the Elliott Wave Script

Vadim Pokhlebkin — Fri, 05 Apr 2013 15:15:00

Tuesday evening (Apr. 2), with the S&P 500 just 3 points from its intraday high that day of 1573.66, Steve Hochberg posted an urgent, unscheduled issue of The Short Term Update. Steve showed subscribers this chart, and said...

20 Sentiment Measures Show Extreme Optimism for US Stocks

Editorial Staff — Tue, 02 Apr 2013 13:15:00

Investor sentiment is a double-edged sword. It can be a fast-moving target with fleeting predictive value, but when several sentiment measures align, watch out!

NASDAQ's 15% Drop in 2000: a Snapshot of Market History or a Picture of its Future?

Bob Stokes — Wed, 27 Mar 2013 17:15:00

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."

What a Rooster and the Stock Market Have in Common

Bob Stokes — Fri, 22 Mar 2013 17:30:00

Like a tree, which grows according to its natural form regardless of the weather, the stock market's progress is also endogenously regulated. Its price pattern forms independently of external events. Japanese scientists have just discovered that another occurrence in nature is internally regulated.

Two Big Names Give 'Thumbs Up' to the Stock Market

Bob Stokes — Wed, 20 Mar 2013 16:45:00

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.

Bear Markets Are Inevitable

Bob Stokes — Mon, 18 Mar 2013 16:45:00

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.