Private Equity: From “Movers and Shakers” to…?

It’s a very exciting time in financial markets with huge changes taking place.

Using ratio analysis with an Elliott wave can give us an edge as to what to expect next. Let’s take a look at a current example.

In recent years, the private equity and credit sector has boomed as the era of free money from central banks added fuel to the positive social mood. Bullish headlines were ubiquitous in 2021 and even into the start of 2022, but things could be changing.

This chart shows the share price of Blackstone Group, a major player in private equity and credit. After peaking in 2021, the five-wave decline took the form of what we call in Elliott wave a “leading diagonal.” Then, a three-wave A-B-C expanded flat correction occurred, with Wave C of the pattern taking the form of an ending diagonal.

An expanded flat pattern occurs when Wave B ends beyond the start of Wave A and Wave C ends beyond the end of Wave A.

What is most interesting to note here is a golden ratio cluster with the September top occurring between the 0.618 retracement of the five-wave decline and where Wave C of the correction equaled 1.618 times the length of Wave A, a common relationship in flat patterns. This is really strong evidence that this Elliott wave labeling is correct.

The question is, what happens now? Someone once famously said, as long as the music is playing, you’ve got to get up and dance. Is the music about to stop in private equity? Stay tuned to Elliott Wave International to find out.

Skip the news. Watch the charts. Sleep better.

For the well-prepared, bull market or bear, there are plenty of tools these days to capitalize on the moves in both directions.

You just need to know where the opportunities are.

If you’re tiredof traditional research that rambles on about what has been— but misses major sea changes in real time, give our Global Rates & Money Flows a shot.

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