A “Very Useful Tip” for Market Forecasters

Good day, everyone. It’s Murray Gunn here, and I’d like to share a very useful tip when it comes to forecasting.

The Elliott Wave Principle offers unique perspectives on technical analysis, and a notable one concerns channeling. After a five-wave movement, we can expect a correction to occur in three waves. There’s a channeling technique that can really help with these corrective waves.

When we can identify the first two waves of the correction, Wave A and Wave B, we can anticipate where Wave C might end. By connecting the start of Wave A with the end of Wave B and drawing a parallel channel from the end of Wave A, a potential target for Wave C emerges.

This chart shows the yield spread between an index of junk bonds to U.S. treasuries. When the spread is going up, junk bonds are under-performing, and this is often associated with bear markets in stocks. After a five-wave advance from 2021 to 2022, the yield spread has been correcting lower over the past year.

Using our Elliott wave channeling technique, we connect the start of Wave A with the end of Wave B and parallel that from the end of Wave A. After hugging the Elliott channel for a while, the spread has finally spiked up, making it probable that the C Wave of the correction has ended.

This could be a really important clue as to what is coming for financial markets, so stay tuned to elliottwave.com to stay ahead of the crowd.

A single well-made chart. That’s all it took!

And now you know what’s likely next for a whole host of markets.

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