Exactly one year ago, our January 2011 European Financial Forecast published this forecast:
"A bearish [Elliott] wave formation is aligning with some of the most bullish sentiment readings we've ever seen. The combination suggests that 2011's [bearish] turnaround will be one of the most dramatic ever."
Within two months, the FTSE 100, CAC 40 and Eurostoxx 50 had indeed ended their rallies and turned down. The German DAX turned lower in April and ended 2011 down 15%, with the French CAC 40 and Eurostoxx 50 off more than 17%. British shares dropped nearly 6%.
Today, most analysts remain convinced that stocks will stage a turnaround in 2012.
What do the Elliott waves say about Europe in 2012?
You get answers in the new, January 2012 European Financial Forecast:
ELLIOTT WAVE OVERVIEW: Since August 2011, the FTSE 100 has rallied in a series of three-wave structures. The FTSE Small Cap Index recorded lower lows in both October and November. The DAX's retracement high this past fall was a Fibonacci 61.8% of its previous decline. Rallies were weaker in the CAC 40 and Eurostoxx 50, as both indexes have retraced about 50% of their respective sell-offs. Get the detailed analysis of these observations -- and our forecasts -- in the opening section of the January 2012 European Financial Forecast.
MARKET PSYCHOLOGY: Said the January 2011 European Financial Forecast: "The consensus opinion is that 2011 won't be [just] a good year for stocks -- it will be a great one." 2011 losses have dampened the professional outlook for 2012, but not by much. A year ago, Barron's panel of 12 European market experts forecasted a 15% gain for the Eurostoxx 600 in 2011. Even though the index lost exactly that percentage, here's the headline this year: "Investment Pros Look for Rebound in 2012." Learn what we make of all this optimism.
EUROPEAN DEFLATION: When our European Financial Forecast commented on the likelihood of European bank runs a year ago, only a relative few depositors had extracted large sums of money. Now it's the everyday depositors who are worried. The trend toward deflation is chiefly caused by society's psychological shift away from expansion and toward conservation. We show you Europe's Elliott wave patterns that reveal how long this trend should continue.
THE EURO: Over the past eight months, the euro has fallen nearly 15% against the dollar. Alongside the euro's descent, trader sentiment toward the single currency went from euphoric at the May 2011 highs to miserable on December 14, for example, when just 3% of futures traders reported being bullish on the euro. Our conclusion? Expect a "euro surprise" soon.
INFLATION? WHERE? After rising into early 2011, the Thomson Reuters/Jeffries CRB index of worldwide commodity prices peaked in April. It has since fallen 15%. Eight months of falling commodity prices have dampened the consensus view on inflation, but it still remains today's
boogeyman du jour. And it shouldn't be. Read the "Economy & Deflation" section for answers.
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Here's what you get:
The European Short Term Update
A near-term focus on European markets aims to give you the insight you need to act decisively before short-term market moves. The Update is published every Monday, Wednesday and Friday, so you're never in the dark about near- and intermediate-term trends in Germany's DAX stock index, Britain's FTSE-100, France's CAC40 and Eurozone's Dow Jones Euro Stoxx 50 -- and other markets.
The European Financial Forecast
With an intermediate- to long-term focus on 12+ European bourses, you get the invaluable big-picture outlook most investors only dream of. You tap into important social trends moving alongside the regional indexes, and be warned of developing market opportunities long before they occur. You get the knowledge to anticipate how the waves of social mood will affect the political and corporate environments across Europe, helping you invest with confidence.
The Elliott Wave Theorist
Trusted since 1979, Bob Prechter's straight-talking Elliott Wave Theorist is the bedrock of EWI analysis. Delightfully contrary, refreshingly logical and downright accessible, the Theorist is a must-read for every independent investor. You get thought-provoking analysis and forecasts on the near-, intermediate- and long-term direction of the financial markets, critical trends in investor psychology plus timely in-depth research and insights you're guaranteed not to get from any other source.
You can try to keep up with more than 45 countries on the European continent and Europe's 5 major stock markets yourself -- plus struggle to catch developing opportunities in lesser-followed markets all on your own -- or you can tap into the mother lode of unconventional, yet accessible analysis here at Elliott Wave International. Let us research the European markets for you, so you can concentrate on successfully navigating the opportunities that arise.
- Germany's DAX stock index
- Britain's FTSE-100
- France's CAC40
- Eurozone's Dow Jones Euro Stoxx 50
- The Netherlands' AEX
- Switzerland's SMI
- Spain's IBEX 35
- Italy's S&P/MIB
- Belgium's BEL20
- Austria's ATX
- Sweden's OMX
- Norway's OBX
- Greece's FTSE ASE
- Russia's RTS
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