Related Topics
Stocks , Investing , US Markets
Share This Page         

How Investor Psychology Has Reached a Critical Juncture

"Measures of complacency … are right back to where they were on … the day of the Dow's peak."

by Bob Stokes
Updated: June 07, 2018

Elliott Wave International analysts have learned throughout their decades of market observation that when investors turn complacent, a jarring volatility often follows.

For example, the September 2007 Elliott Wave Theorist said:

The market is certainly poised for a panic. Confidence has held sway for 2½ decades, during which time investors have become utterly unconcerned with risk. They hold a number of misconceptions that foster such complacency.

Just weeks after that commentary published, the DJIA topped and then fell 54%.

Fast forward to January 5, 2018. Complacency was once again widespread among investors, from hedge fund managers and financial advisors to Mom-and-Pop market participants. The Elliott Wave Financial Forecast said this:

According to the latest American Association of Individual Investors poll... there are currently 3.8 bulls for every bear, the highest ratio in seven years. History shows that this normally cautious group generally only capitulates to a bull market trend in its late stages.

As I'm sure you know, the DJIA topped later in January, and that was followed by some wild days of market volatility.

Now, here we are in June 2018, with a critical update on investor psychology.

Here's a chart and commentary from our June 6 U.S. Short Term Update:

GreatestComplacency

Measures of complacency toward the prospects of a decline are right back to where they were on January 26, the day of the Dow's peak. The chart shows the DJIA and the CBOE Volatility Index (VIX), which today closed at 11.65, the lowest level since the day of the January top (11.08). Traders are as complacent as they were in late-January, but prices are at a lower high...

Just look at these June 6 CNBC headlines:

  • Wall Street's biggest bull sees the S&P 500 at records by year's end
  • This 18-year-old launched a hedge fund from his bedroom in suburban New Jersey
  • Investors see tech stocks as defensive now

All these are indications of an epic complacency.

Investor psychology is clear: It's vital that you stay up-to-the-minute on the DJIA's price pattern, which has reached a pivotal juncture.


Let's Confront Your Greatest Investment Fear Head-On

Is it the fear of loss? Or, perhaps, the fear of missing out? Or, maybe you're worried that you simply don't have the knowledge to make informed investment decisions.

Here's good news: To see the real driver of stock prices through the eyes of our Elliott wave experts will HELP YOU sweep these fears aside.

After your review, you'll find yourself facing financial markets with a WHOLE, NEW CONFIDENCE.

And, the icing on the cake is that your review of our analysts' market insights is RISK-FREE!

Learn how to get started by reading below …

Here's How Your Financial Forecast Service Team Works to Prepare YOU For New Opportunities

Read This, And Then Let Us Show You FFS in Action, 100% Risk-Free

Your Financial Forecast Service team includes three of the best-known market analysts in the world – Robert Prechter, Steven Hochberg and Pete Kendall. If you are familiar with Elliott wave analysis, you know exactly who they are.

No other analysts in the world, anywhere, undertake the depth of research that goes into the Financial Forecast Service. Throughout the month, Bob, Steve and Pete sift through mountains of data, often studying 100 years of data or more. Why? Because a chart of the big, long term waves is the only way to know precisely where in the pattern we are today – and therefore, precisely where we are most likely to go next.

Here's what you get with the Financial Forecast Service, 100% Risk-Free for 30 days

Every Month

At the end of each month, your team of analysts gets together and lets the sparks fly. The result? The Elliott Wave Financial Forecast. It's just one of three essential parts of your Financial Forecast Service. When you get a new issue, you can be sure it contains the most critical information you must know about the markets this month.

Three Days Per Week

In addition, at the end of the U.S. trading session every Monday, Wednesday and Friday, your team updates its monthly analysis with the Short Term Update. In STU, they prepare you for the most likely price moves in the next 3-5 trading days.

Latest Research

Finally, once every month, Robert Prechter sends you his very latest research about Elliott waves in the markets and society. For 30+ years, The Elliott Wave Theorist has delivered more groundbreaking market research than any other publication on the planet. One month Bob might prepare you for a multi-year move in a market; the next he will deliver a jaw-dropping study that challenges everything you thought you knew about investing. Whatever he writes, it will help you hone your grasp of the psychology behind the markets – and give you an enormous advantage over other investors.


Limited-Time Offer

The U.S. Stock Starter Kit

To get you up to speed fast, we've created the U.S. Stock Starter Kit.

The forecasts, analysis and resources included in this Kit provide the best way to quickly acclimate to the current market environment. You get:

Comprehensive U.S. Market Coverage

One month of the Financial Forecast Service

Our research indicates the second half of 2018 will be one for the record books. Your team of U.S. market experts makes sure that you have the very latest analysis to help you prepare for what's next.

Three hand-picked resources - free

Three investor resources hand-picked from our educational library — a $247 value – absolutely free.

2018 will separate investors using truly sound approaches from those who have built their strategies on false assumptions. We picked these three resources to help you know the difference.


 

1
Elliott Wave Principle - Key to Market Behavior
EWI eBook | 258 pages | $29 value

This Wall Street bestseller is the most useful and comprehensive guide to understanding and applying the Wave Principle. A groundbreaking investment classic, Elliott Wave Principle is hailed by reviewers as the "definitive textbook on the Wave Principle."

 

2
Trading the Elliott Waves - Winning Strategies for Timing Entry & Exit Moves
Streaming Video | 2 hours | $99 value

Gain unparalleled insight into the power of Elliott waves to precisely time your market moves. In this 2 hour presentation, Robert Prechter provides thought-provoking techniques and startling accurate strategies that will help you harness predictable signals in the marketplace, and use them to your trading advantage.

 

3
How You Can Identify Turning Points Using Fibonnaci
On-Demand Course| 4 hours | $129 value

In this intensive course, Senior Tutorial Instructor Wayne Gorman teaches you how to apply Fibonacci relationships to your own trading. Wayne walks you through a host of charts and real-world exercises to show you exactly how to apply Fibonacci relationships alongside the Wave Principle and as a stand-alone technical tool.

 


Start Your Subscription Now

$306 $59

for one month of unparalleled market insights plus the U.S. Stock Starter Kit
*this limited-time offer ends July 1