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Europe’s Best-Performing 2019 Market: a Harsh Lesson in Complacency

Even a quick look at a chart’s Elliott waves “usually pays off in spades”

by Bob Stokes
Updated: April 02, 2020

In the world of investing, "complacency" is a potentially hazardous state of mind.

Consider that every year, September and October have often been rough on investors. But, in 2019, the S&P 500 had gained approximately 2% during each of those months.

Investors were comfortable with owning shares. Too comfortable.

That's why in November 2019, the Elliott Wave Theorist discussed the U.S. stock market and said:

Complacency is widespread now.

Yes, that complacency actually extended well beyond the borders of the U.S.

Indeed, in 2019, investors were even pouring into some of the past decades worst-performing markets. As examples: Moscow's main stock index spiked 29% and Italy's MIB index rose 28%.

Even Greece, a nation that brings to mind headlines of financial woes, had its equity market as Europe's top performer in 2019.

In fact, our January Global Market Perspective zeroed in on Greece specifically and showed this chart as an example of extreme complacency:

Jan2020Greece

That complacency indeed marked a top in Greece's ASE Index. Here's an updated chart from our March Global Market Perspective, along with the commentary:

March2020Greece

After prices briefly rose above the diagonal lines in a pattern that R.N. Elliott referred to as a "throwover," the Athens Composite reversed course and plummeted 21%. Investors punished all stock markets in February, but they positively brutalized the markets they still perceive to be riskiest. As we have said before, it's never wise to blindly jump into a market no matter how beaten down it has become. Likewise, even a quick consultation with the waves usually pays off in spades.

You see, in addition to the epic complacency, Elliott waves in the ASE Index also clearly indicated to our subscribers that a change in trend was at hand.

Now that the expected downturn has occurred, this is the time to learn what Elliott waves -- in addition to sentiment indicators -- are revealing about what's next for 40+ worldwide markets.

You can review the current issue of our comprehensive Global Market Perspective without any obligation for 30 days. The new, April issue comes out in just a few days.

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